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Originally Posted by Shadywood
I believe we were talking about inflation, not the national debt, which, for those keeping score, now stands at close to 30 trillion. But you're right, though. Reagan and Tip O'Neil are responsible for about 6% of that, because Reagan refused to inflate the money to pay for the freebies and foolishness that Tip refused to cut from the budget, like Reagan requested.
Between you and me, I'd prefer a world where debts are paid with real money, because it means I get paid for my savings.
For the 75 years before Obama turned the Fed's Magic Money Machine up to "11", to pay for a housing crash that Washington created, you could get 4.25% in any federally-insured passbook savings account at any bank in the country. But now that we Boomers need a safe investment, we're lucky we you don't have to pay the bank to hold our money, and if we hope to keep up with inflation, we're forced to play stock market roulette in the Wall Street casino.
Inflation matters.
It would help if the average American understood that inflation everywhere and always is the result of printing money. It seems like such a simple concept -- if you have too much of something, it's worth less. But the minute you mention this obvious property of the universe in the context of inflation, suddenly everyone retreats to their political bunkers.
It makes it tough to fix anything when we can't even agree on the properties of the universe we live in.
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National debt and inflation are correlated. Why do you think the Fed creates so much money? Why are interest rates so low? Largely to make paying the interest on the national debt a bit easier.
The national debt creates a double whammy: The Fed has to create money out of thin air to pay the interest, thus encouraging it to keep interest lates low, and that in turn encourages inflation.
To cite an administration as the hero of fiscal responsibility, and to ignore the effect of that administrations policies on the increase in the national debt that ensued is to look at only the half of the picture that suits your narrative.