Why can’t a government forgive it’s own internal debt?
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That’s basically printing money. It would devalue your currency and cause hyper inflation.
Like if you had $10 of value in the economy, represented by $10 in currency floating around, then you have a stable economy. If you take that economy and put in $90 more w/o increasing the value of your economy, then you aren’t increasing your value by 10x, you are reducing the value of each dollar by 1/10.
The same would happen if the government forgives its own debt. If the government is -$10 in debt to itself, that negative value is accounted for in the economy. If we were to just wave our magic wand and make that -$10 not exist anymore, it doesn’t add value to the economy, it just reduces the value of the currency in the economy by a proportional amount.
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