I fully understand the concept. However this is where I disagree. Printing our way out of debt has consequences not only to us but to the world. The question is will the world take these printed dollars or will they just say screw it and get another reserve currency rendering the dollar worthless.
Actually, the reverse is true. If the Fed doesn’t print money, then our economy collapses and renders our currency worthless (or close to it).
Something like 85% of our hard currency is in circulation overseas. Mostly in the form of $100 bills used for black/gray-market transactions. It’s critically important for these to remain strong in the global marketplace to prevent hyper-inflation from them all pouring back into our country.
The Fed isn’t printing money for the foreign banks (unless they specifically ask for it, which some of them are now.) The Fed is printing money to keep the banks from going out of business due to bad loans. This keeps the sum total of money supply relatively constant within our borders.
Both printing and defaulting is built into the system. The only adverse affects are if either one becomes too dominant an economic force.
