Adi The Cat

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[Adi The Cat @AdiTheCat28]

@HenryGustav4 @TheLeaderAdi @smurffberriess @Parodyjeffx @grok The dominant effect of rate hikes is disinflationary. They cool demand by making borrowing/spending more expensive, reducing pressure on prices over time. The big inflation spikes started before rate hikes.

[Adi The Cat @AdiTheCat28]

@HenryGustav4 @TheLeaderAdi @smurffberriess @Parodyjeffx @grok Inflation surge, higher national debt and interest burden, and inefficient allocation and waste.

[Adi The Cat @AdiTheCat28]

@HenryGustav4 @TheLeaderAdi @smurffberriess @Parodyjeffx @grok Mmt theory

[Adi The Cat @AdiTheCat28]

@HenryGustav4 @TheLeaderAdi @smurffberriess @Parodyjeffx @grok Hardworking people's retirements are tied up in that debt. Stiffing bondholders isn't "sticking it to the rich." It's nuking confidence in the dollar

[Adi The Cat @AdiTheCat28]

@HenryGustav4 @TheLeaderAdi @smurffberriess @Parodyjeffx @grok Causing supercharged inflation and higher interest

[Adi The Cat @AdiTheCat28]

@HenryGustav4 @TheLeaderAdi @smurffberriess @Parodyjeffx @grok With massive costs and trade offs

[Adi The Cat @AdiTheCat28]

@HenryGustav4 @TheLeaderAdi @smurffberriess @Parodyjeffx @grok It's literally the perfect analogy to what you want.

[Adi The Cat @AdiTheCat28]

@HenryGustav4 @TheLeaderAdi @smurffberriess @Parodyjeffx @grok That leads to massive forced austerity or money printing to cover deficits. Choosing not to pay will cause a sovereign default, destroying the dollar's reserve status, spiking rates, and crashing markets. None of those sound easy.

[Adi The Cat @AdiTheCat28]

@HenryGustav4 @TheLeaderAdi @smurffberriess @Parodyjeffx @grok The massive fiscal stimulus created a strong positive demand shock at the worst possible time, so I would give it the major role. Either way, it played a significant role.

[Adi The Cat @AdiTheCat28]

@HenryGustav4 @TheLeaderAdi @smurffberriess @Parodyjeffx @grok It's like thinking you can print unlimited tickets for a plane with fixed seats. You won't run out of tickets, but you'll destroy their value and crash the system.

[Adi The Cat @AdiTheCat28]

@HenryGustav4 @TheLeaderAdi @smurffberriess @Parodyjeffx @grok It's complex, but fiscal discipline still matters.

[Adi The Cat @AdiTheCat28]

@HenryGustav4 @TheLeaderAdi @smurffberriess @Parodyjeffx @grok I'm willing to discuss further but the truth is that maybe a combination of both views is best. The US can't involuntarily default as a currency issuer, but we also can't ignore the reality that 1T+ annual interest payments on 39T+ debt are a serious concern.

[Adi The Cat @AdiTheCat28]

@HenryGustav4 @TheLeaderAdi @smurffberriess @Parodyjeffx @grok We should have never shut down and spent all of that money.

[Adi The Cat @AdiTheCat28]

@HenryGustav4 @TheLeaderAdi @smurffberriess @Parodyjeffx @grok Proof is in the post 2021 inflation spike after massive deficits and stimulus

[Adi The Cat @AdiTheCat28]

@HenryGustav4 @TheLeaderAdi @smurffberriess @Parodyjeffx @grok Sovereignty means we can't involuntarily default, sure. But it doesn't mean deficits are free. It will just end up in turning the dollar to shit. 1T in annual interest is real money crowding out priorities. If I remember correctly, it's above our defense budget.

[Adi The Cat @AdiTheCat28]

@HenryGustav4 @TheLeaderAdi @smurffberriess @Parodyjeffx @grok It shows mixed reality. It's helpful in recessions, but chronic large deficits raise long-term rates, and crowd out investment.

[Adi The Cat @AdiTheCat28]

@HenryGustav4 @TheLeaderAdi @smurffberriess @Parodyjeffx @grok Prices going up is a tax on everyone holding dollars.

[Adi The Cat @AdiTheCat28]

@HenryGustav4 @TheLeaderAdi @smurffberriess @Parodyjeffx @grok Creating dollars from keystrokes doesn’t create more workers, time, or raw materials. It just bids up the price of what already exists.

[Adi The Cat @AdiTheCat28]

@HenryGustav4 @TheLeaderAdi @smurffberriess @Parodyjeffx @grok Thats exactly why large, persistent deficits matter. When government spending competes for those scarce resources especially near full employment, it drives up costs, crowds out private activity, and.. or causes inflation.

[Adi The Cat @AdiTheCat28]

@HenryGustav4 @TheLeaderAdi @smurffberriess @Parodyjeffx @grok That process erodes purchasing power with an inflation tax and risks loss of confidence in the currency over time.A sovereign issuer has more flexibility than a household, but it is not free from real resource constraints or the long-term effects of unlimited issuance.

[Adi The Cat @AdiTheCat28]

@HenryGustav4 @TheLeaderAdi @smurffberriess @Parodyjeffx @grok When the government routinely spends more than it taxes and the fed accommodates it, you expand the money supply without a corresponding increase in real output.