It's a complex issue, but I see no reason why the Government couldn't inflate debt out of existence, maybe even "with the consent of the governed". There are always ways to handle the day to day problems, like managing al sorts of cost of living adjustments, etc. etc. If anything, people would become even more dependent on the Government, which will have to heroically manage things through the hard times.
Look at some recent examples - Israel in the mid-to late 70's, Russia in the late 80's - to 90's... Not such a big deal - the old currency gets devalued to the level of trash, some people suffer from that, others benefit... and then, in due course, they print new paper money, even prettier then the old, and you know what? Life goes on. The cycle starts all over again. |
