What historical data shows high deficits are unsustainable or have caused recessions, depressions, inflations, tax increases, reduced availability of lending funds and/or any other negative economic effect?
Ask California! CA is the 10th largest economy in the world. The 2010 budget is $26B over budget (under funded). The CA gov't could become insolvent without catastrophic cuts and a Federal bailout. Though Keynesians (Obama) believe that "money itself doesn't matter", real damage is done to the psychology of the citizenry when markets collapse and budgets don't balance. It is stressful for most to think that finance has different sets of rules for its big and small players.
The search for people who can answer your question continues for as long as needed - until you find the answer you were looking for.
When an answer is posted by someone who was invited (byYedda or by yourself) to answer your question, their answer is marked with a yellow "invited by Yedda".
To be invited to answer other people's questions in your areas of knowledge and interest, be sure to list your favorite topics:
» My Settings › My Topics.
Of course, the more helpful your answers are, the more likely you are to be invited to future questions...
If you read about the Federal Reserve, you can learn how the Fed has manipulated the money supply (how much cash is on hand) regularly for most of the last 100 years. Each time they increase the supply, it drives up inflation because it's cheaper to borrow money and everybody does it because everybody else is doing it and companies don't want their competition to get ahead of them.
Increasing the money supply is done by making money out of thin air so money isn't worth as much, thus you have created inflation. I hope that helps
Got an answer for Rodger Malcolm Mitchell? Would you like to comment on the posted answers, or vote for the one which you think is the best?
Sign up for a free account, or sign in (if you're already a member).
Other people asked questions on similar topics, check out the answers they received:
