He was suggesting the Fed prints more dollars so they can pay off the debt.
They don’t care about the consumer, but they don’t want the debt to spiral out of control. I bet they are looking forward to a housing bubble collapse, so consumer spending slows, leading to reduced imports and a lower deficit. But what about the national debt? The printing dollar theory seems plausible as a method to reduce the national debt, because that’s the only way to pay it off. But, there are downsides to being the holder of debt, regardless of the debt’s deflationary valuation. Say the bank goes under and recalls its loans and you have to get a new loan but can’t because the interest rates are too high. Or deflation leads to job loss and you lose your job and can’t keep up with the payments. Oops, there goes your house. Possible? It just feels wrong to me to take on huge amounts of debt in the hope that this debt might be worth 10% or 20% or 50% less. I still have to service it. Maybe I’m way off base.
