Robin on Nostr: Musk’s #doge savings work against the Fiat system… Rationale No, government ...
Musk’s #doge savings work against the Fiat system…
Rationale
No, government “saving money” (e.g., running a budget surplus) actually works against the strategy of inflating debt away over time. Here’s why:
1. Debt and Inflation Work Together – Governments that operate on a debt-based monetary system rely on inflation to erode the real value of their debt over time. Inflation benefits debtors (including governments) because they repay borrowed money with devalued currency.
2. Government Savings Reduce Inflationary Pressure – When a government runs a surplus or saves money, it is effectively removing money from circulation. This is deflationary, as it reduces demand in the economy, making it harder to inflate away existing debt.
3. The Preferred Strategy is Deficit Spending – Instead of saving, governments often spend more than they take in (deficit spending), borrowing to cover the gap. This increases the money supply and fuels inflation, which helps reduce the real burden of past debt while simultaneously eroding the purchasing power of citizens’ savings.
4. “Stealing” via Inflation – Inflation acts as a hidden tax, transferring wealth from savers and wage earners to debtors (including the government). If the government were to save money instead of spending, it would slow this process, making it harder for them to devalue their debt over time.
5. Central Banks Enable the Process – Most modern governments don’t directly control the money supply; their central banks do. Central banks often print money (via bond purchases or lowering interest rates), ensuring there
Rationale
No, government “saving money” (e.g., running a budget surplus) actually works against the strategy of inflating debt away over time. Here’s why:
1. Debt and Inflation Work Together – Governments that operate on a debt-based monetary system rely on inflation to erode the real value of their debt over time. Inflation benefits debtors (including governments) because they repay borrowed money with devalued currency.
2. Government Savings Reduce Inflationary Pressure – When a government runs a surplus or saves money, it is effectively removing money from circulation. This is deflationary, as it reduces demand in the economy, making it harder to inflate away existing debt.
3. The Preferred Strategy is Deficit Spending – Instead of saving, governments often spend more than they take in (deficit spending), borrowing to cover the gap. This increases the money supply and fuels inflation, which helps reduce the real burden of past debt while simultaneously eroding the purchasing power of citizens’ savings.
4. “Stealing” via Inflation – Inflation acts as a hidden tax, transferring wealth from savers and wage earners to debtors (including the government). If the government were to save money instead of spending, it would slow this process, making it harder for them to devalue their debt over time.
5. Central Banks Enable the Process – Most modern governments don’t directly control the money supply; their central banks do. Central banks often print money (via bond purchases or lowering interest rates), ensuring there