[ignasheahy]

>Also, what weak economy? Economic growth is up, wages are up, unemployment is down, personal debt is down.

That usually happens in the beginning stages of high inflation scenario.

Also government debt is not the same as household debt, however it still matters especially at these high levels. There is a breaking point just no one knows where it is. 300% gdp? 500%? 700%. At some point it will break down.

[littlestymaar]

What would break mean? The US debt, like all debt, is somebody else's asset. This “somebody” has zero interest in collapsing the system.

The only two things that can actually make the system collapse in the next 30 years are:

- a communist revolution in the US (this is not happening anytime soon, do not worry).

- zealots with a debt fixation, who would rather collapse the entire economy because they think debt is immoral. This one is a little bit more likely, but given the strong ties between the financial sector and the political parties in the US, I really doubt these people would ever be in charge. Republican, when they don't control the White house, are prone to rant about how debt is unsustainable and should be reduced at all cost, but whenever there is a Republican president, the debt keeps rising.

[ignasheahy]

What I mean by "break" is runaway inflation or hyperinflation. That doesn't mean the whole system collapses. The rising debt or money supply is not a problem - the problem is its second derivative - how fast rising increases and how connected it is with underlying economy. And this points to a kinda dire future at the moment.

[littlestymaar]

Hyperinflation (or even “a little bit to high” inflation) would literally destroy billions of financial assets (public and private debt), given the enormous political power of the finance industry, it's not going to happen.

Also, there is exactly zero historical instance of hyperinflation caused by public debt labelled in a country's own currency. Zero.

There's little rational reasons to believe public debt will cause hyperinflation, and as I mentioned above there are in fact powerful effect acting in the opposite direction.

The only reason people make the link between those two is that hyperinflation is the canonical example of an economic catastrophe and because people believe debt to be immoral, it must lead to a catastrophe in the end. This is a religious/moral discourse, which has no link with the actual world.

And to conclude, keep in mind that high level of public debt is a political decision (borrow from the wealthy instead of taxing them) it would be quite straightforward to fix (with the 60s income tax level) but it's in the interest of no-one with a bit of political power.

[ignasheahy]

All of the instances of inflation is linked to government debt, what are you talking about? Even kings were cutting weight of silver coins in middle ages.

[littlestymaar]

TIL there were hyperinflation episodes in Europe during the middle age (not). You have never read a book of economic history (or even just history) right?

For the record: most of inflation comes from rising costs in the supply chain (from supply issues, resources scarcity and/or wage raises). This is where we are now.

There exists instances of hyperinflation related to debt (Weimar republic's for instance) but this was due to debt labelled in a foreign currency (basically gold in this case).