Fiat currency allows for producers of said currency to produce an infinite amount, but doing so undermines faith in that currency. Let's say the US took a trillion dollar loan out. The person handing out that loan expects to make that money back with interest. However, the US instead generates 50 trillion dollars to immediately pay them back along with paying back all other loans, and have some left over for fun.
Before that money was produced, that trillion may have been about 2% of the US's total money in active circulation. Now, that trillion is about 1%. On paper, it's already halved in value. It becomes notably worse when faith is factored in.
Why would anyone invest, loan, or accept money from America after this? Any money from them could get halved, quartered, or worse if you did. Therefore, other countries massively reduce the value of the dollar relative to other currencies, and people don't want to give loans because it's now much harder to determine what the loan should ask for to ensure they're not shorted again.
It'd even start hitting within America. In this example where the relative value of currency was only halved, companies with an international presence would want to start accepting some other currency, and that is likely to trickle down into local-level transactions. Demand for non-dollar currency would further drive down the relative value of the dollar to those other currencies.
If you want examples of this collapse, look no further than Germany after World War I or modern Venezuela. They generated a shitload of money overnight, "paid" all the bills, then destroyed faith in their economy.
It's something that should probably get investigated. Was the husband involved in the research, or did the wife specifically figure out the lethal dosage and fool the husband into drinking fish tank cleaner? Was there life insurance taken out of the husband, and if so, how recently was that made? If there was life insurance, would she dispute not getting it on account of him effectively committing suicide if it wasn't her murdering him? How secure was their marital status prior to this event? Were they economically stable, or did the unemployment wave hit them as well?
Perhaps she considered this her chance to kill two birds with one stone: kill the husband and reinforce her political standing. People have been caught for more petty things.
If inflation is allowed to continue as expected, 3.3 trillion of tax revenue today would become 6.6 trillion 20 years from now, 13.2 trillion 40 years from now, 26.4 trillion 60 years from now, 52.8 trillion 80 years from now, and 105.6 trillion 100 years from now.
Debt doesn't scale up with inflation, as long as you freeze the interest and do not borrow more. 23 trillion in 2020 is 766% of the federal government's annual income. Assuming inflation remains at the expected 3% per year the Federal Reserve tries to maintain, 23 trillion in 2120 would be 21.7% of the federal government's annual income.
The Federal Reserve prints more money into our system for the following reasons:
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To offset demand: As a population grows through immigration or babies, those people will eventually want money. More people wanting that money means the fiat currency more valuable.
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To offset lost wealth: This means dollars lost, dollars stockpiled, and dollars destroyed.
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To make things more predictable: When the producer of a given currency guarantees exactly X is produced each year, this makes investors feel more secure in investing in the government that uses that currency. For example, the US Federal Reserve tries to keep the amount produced at 3% of the total evaluated economy. By contrast, the Venezuelan government took over the means of currency production in their country and decided to print out trillions of dollars to pay off all their investors in a single day. Not only did the supply of Venezuelan currency skyrocket (thus, overabundance of supply), but it destroyed faith in their currency (investors do not want to give Venezuela money because who's to say the government won't fabricate absurd amounts of money from thin air to pay off whatever number they're told to pay).
Regardless, this results in more dollars being in the system, reducing the value of existing dollars. This is otherwise known as inflation.
tax revenue only pays the interest on the debt, all the rest the govt needs is more debt.
That is absolutely incorrect. They made 3.3 trillion in 2018. They spent 3.8 trillion in 2018. That's +0.5 trillion (500 billion) in debt to balance their budget.
The existing debt has interest which was around 450 billion in 2018. 450 billion plus 500 billion is 950 billion, or nearly 1 trillion in total added debt for 2018.
If we had 20 trillion dollars of debt in 2017, 2018 made that 20.95 trillion dollars of debt.
The problem we have right now is in two parts:
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We're not dealing with the interest at all. This means the debt will grow on its own even though we're not getting any benefit from it.
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We have too much debt to realistically pay off within even 10 years.
The former is solvable: factor the interest into the budget and make sure the budget doesn't require further loans. The latter is solvable only if given enough time to allow inflation to decrease the significance of those numbers.
I did say we're adding about a trillion dollars of debt per year since 2008, but that is my bad for talking about budget instead of tax revenue.
Google says 3.33 trillion in fiscal year 2018, and it's been over 3 trillion since 2014.
currencies arent immortal
Currency doesn't need to be immortal. Debt remains with the country, and the country lives as long as whoever's at the helm doesn't screw up too badly.
do we really take in 3 trillion in taxes per year?....
Google has US federal budget at 3.8 trillion dollars.
also...you cant inflate away debt. debt csant be solved by more debt
You most certainly can inflate away debt if you're immortal, can zero out interest long enough, and the currency you use is undergoing inflation.
Debt can sometimes be reduced by more debt, in that sometimes loan agencies will offer to pay off the entirety of a different agencies' loan for a lower interest rate than the original. However, the point I was making is that 0 interest rate means the debt we accrue now will have no real effect on the US's ability to pay off the total debt (assuming that 0 is a real 0 and not "0 for the first 12 months" or something). We may not be able to pay off the debt within our life time, but the government a hundred years from now could assuming we keep it locked in place.
This may end up being a bit rambling, but here it is:
The US government makes approximately 3 trillion dollars yearly from taxes. Each year, the government consumes all of that through various means and adds about a trillion dollars of debt to keep everything running the way it's been running. This has been the case since 2008 or so.
When a country takes on debt, there's an interest rate. This means, every year the debt goes unpaid, a percentage of that debt is added again, making the debt larger and accruing more debt on subsequent years if it and the initial loan isn't paid off.
Before the pandemic, the United States had ~23 trillion dollars of debt and 450 billion dollars in interest across the various loans. Between the stock market bailout and the emergency aid, we're looking at another 3 trillion dollars of debt from just March of 2020.
If we were to budget for the interest and not take on additional debt, we'd eventually make the existing debt insignificant due to economic inflation. The federal reserve attempts to maintain an inflation rate of about 3% per year, which is why most things double in price every 20 years or so. It's also why most loans have interest; the person loaning the money breaks even or comes out ahead for spending money today to get money 1-30 years from now.
Having zero interest is unheard of because of inflation. However, even investors know this event could collapse a country, and a collapsed country won't pay its debts. Since investors pretend debt is as good as money, having that evaporate would be catastrophic to some currently-rich people.
For immortal things like countries, debt isn't that important. In a hundred years, 3 trillion will be equivalent to 93 billion, which would be ~9% of the government's budget at that time. The problem arises when interest gets involved, especially if it's either higher than the inflation rate or if it's being ignored. If we can consistently negate the interest, the debt will eventually be insignificant.
Bernie is more likely to be dead than not by 2024. His heart attack on October 1st, 2019 is known as the widowmaker. The American Heart Association released a neat little study in 2018 that looked over the likelihood of death after having a heart attack for older individuals. Bernie is placed at a 24% chance of dying within the first year, with a 50% chance of dying within 3.1 years of his heart attack.
I should also mention that some news sources tried to claim Bernie's chances of death are 5% within the first year and 25% within 5 years, but that's using a CDC release from 2004 which did not separate by age.
I mean, Muhammad's story is quite the opposite of that. He was alive during an era of religious corruption where priests and merchants were selling idols of various gods and claiming that the materials and price of the idol dictated how well the various depicted gods would hear your prayers. To not buy an icon was to doom yourself to be hated by that god.
The Islamic religion was a cult that was competing with the mainstream religion at the time, but Muhammad wasn't really related to them. He just thought the idols were bullshit, broke them in a public spectacle, then fled because he knew they'd kill him in a terrible way if he was caught.
Because the people were dead-sick of the religious system in place, Muhammad was labeled a hero of the people. Because the Islamic religion was struggling to get a foothold, they co-opted Muhammad's name. This, combined with the vacuum of power of many not wanting to be part of the established religion, allowed the Islamic religion to become the primary religion.
Then they ironically took the sacred icons that Muhammad destroyed and made them sacred icons of their religion, which really is a sign of how Muhammad definitely wasn't related to the Islamic religion. He hated icons in religion. It was his entire reason for making a stand against the established religion. He's used as an example for an iconoclast.