Posts

News and Opinion: September 25, 2022. US "Inflating Away" Debt

avatar of @marcusantoniu26
25
@marcusantoniu26
·
0 views
·
1 min read

The United States seems to be "inflating away" its debt. What this means is that there seems to be no real intention to fight inflation because the high inflation will reduce the real amount of the expense acquired previously. In this case, there was a significant amount of debt acquired at the time of the COVID-19 pandemic. High inflation rates usually reduce the real value of debt, as they allow governments to pay off debts using money worth less than when they originally borrowed it.

However, the trade off is that this could be the start of an accelerated increase in the value of inflation, as the governments find themselves unable to pay off debt. in addition, new debt comes at higher interest rates so it becomes more expensive.

For further information, read this article

This post is intended to only raise awareness. In order to make actual financial decisions please contact your financial advisor and/or tax advisor prior to making the decision.