How does inflation affect national debt

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If we have lower federal rates, that causes an inflation right?

Currently we have massive national debt. And we pay interest on that.

Why not try to maintain inflation just slightly above the interest rate of our debt, so that eventually our debt is irrelevant (the “buying power” of the 30ish trillion dollars would be reduced faster than the interest we pay on it).

In: Economics

11 Answers

Anonymous 0 Comments

That’s a government policy that you could choose, for a while. When consumers see inflation that high, they vote you out of office in favor of your opposition who claims they will cut inflation.

You see, **paying off the national debt isn’t a good thing**, in the way that paying off your personal debt is. If the US paid off its debt and didn’t need to borrow any more, that would be very bad. Many investors balance their portfolio with very safe US bonds, and this makes it financially reasonable for them to invest in companies and grow the economy.

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