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Message:: [QUOTE="NorthKorea, post: 1997131, member: 29643"]Debasing the dollar by 50% (100% inflation) would create much greater problems than carrying a large national debt. The national debt is currently a liability of the government, secured against that entity's ability to levy taxes and existing assets (gold, oil reserves, real estate). By debasing the dollar to pay it off, we'd be transferring the liability to the citizens. A 50% debasement is tantamount to hyperinflation. Hyperinflation is not a good solution to resolve the national debt, since it would force US banks to raise interest rates and likely lead to debt defaults and closure of said banks. A different solution (though somewhat of a "Pandora's box") would be for the US government to sell some of its existing real assets, which include lands currently protected under national parks. The reality is that, regardless of how the national debt is earmarked, we carry the debt to protect our banking system and environmental future. If the debt ever got to a position where it was completely unmanageable, the logical solution would be to cut programs, sell assets or raise taxes. It would never make sense to debase currency by 50% to avoid default on the national debt, as it would simply shift the default from the public sector to the private sector.[/QUOTE]