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"There's nothing to prevent the federal government from creating as much money as it wants and paying it to someone." ~ Alan Greenspan
This should not be a controversial observation. We are not on a gold standard. The US government controls its currency.
It's a fiat currency, & the US can issue it at will. It never needs to borrow or tax in order to spend, and it can never "run out of money."
It is nothing like a household and nothing like Greece, which borrows in a currency (the euro) that it does not control.
It is not dependent on China (or anyone else) for funding.
It can afford to buy anything that is for sale in US$. It can outbid and outlast any other bidder. Always.
What comes to mind when you hear this? I bet it is inflation! And that is a legitimate risk!
The government could abuse the power of purse and try to spend too much money into an economy that just can't handle all the demand.
But what about the inherent *benefits* of our modern (not gold standard) system?
A fiat money system like the one we have means never having to worry about "how to pay for" anything.
We should spend more time thinking about how to take advantage of the *benefits* of our monetary system.
The risks are real, and we cannot ignore them. But our system also affords us the opportunity to build a far more prosperous economy.
It's time for a grown-up debate over the best way to balance inflation risk against the benefits of a safer, cleaner, more secure America.
Thank you for listening. It is back-to-school night. Peace out.
