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by jganetsk 3110 days ago
If they doubled money supply and distributed 1 for 1 to all current dollar holders, lots of debt would get immediately paid off. Unless you are also proposing doubling everyone's debts. But, if not, then this will cause "debt deflation" rather than the inflation you are postulating.
1 comments
andrenth 3110 days ago
Would debt be immediately paid off though? Would people be able to, considering the overall price increases? And if so, how long until they’re in debt again because they can’t keep up with increased prices (since they spent their printed money to pay their debt?)
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jganetsk 3109 days ago
> Would debt be immediately paid off though?

Yes. We all know a lot of people with mortgages, student debt, and credit card debt, who if suddenly given a government handout that would double their savings, would immediately pay off their debts. But I can't claim that all debts would be paid.

> Would people be able to, considering the overall price increases?

Of course people would be able to pay off their current balance if you hand them money. What do price increases have to do with this? Prices may go up (or may not), but your current balance on your mortgage and your credit card bill do not. And if people anticipate interest rates going up, that motivates them to pay it off sooner rather than later. But note that there is a lot of fixed-rate debt out there (like mortgages) not affected by interest rate hikes.

> And if so, how long until they’re in debt again because they can’t keep up with increased prices (since they spent their printed money to pay their debt?)

You keep assuming that prices would go up. Prices are determined by supply and demand. It has been claimed on this thread that prices will go up exactly 2x, but this claim has not been substantiated whatsoever. One potential mechanism for this would be a substantial increase in aggregate demand, as a result of the handout, but much of the money would go into paying off debt instead. This is called "debt deflation". So prices might not go up nearly as much as you are claiming they would.

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