In theory, no government can ever go bankrupt.
No that's incorrect. If a government doesn't issue its own sovereign, fiat currency, it can indeed go bankrupt. Local and state governments, for example, rely mostly on taxation and the US federal government for its revenue. They can go bankrupt or become insolvent, without taxation or assistance from Uncle Sam.
They keep on printing money.
Not all governments can print money without having the gold to back its creation.
In practice, all governments can go bankrupt, and often enough do.
A government that is the exclusive issuer of a sovereign, fiat currency, can't go insolvent or bankrupt.
People stop accepting government paper as money.
What "people" are you referring to and why would anyone stop accepting USD in cash? Today money is also digitized and intangible, it's not all in cash.
The government can force some to accept it, but those who accept it find nobody to spend it with.
Does the US federal government have to "force people" to accept USD? Why? Who are these people who are rejecting USD, and don't want it? What businesses aren't accepting USD now? You're speaking drivel-scribble, gobbledygook.
Again, the USSR printed it's own money until no one would trade with them. At least enough to build up their military.
What does the USSR have to do with the US and its currency? I asked you a simple question and so far, all you've been doing is resorting to a bunch of verbal acrobatics and evasive maneuvers. How can the US federal government, that is the exclusive issuer of the USD, become insolvent? Simple question, just answer it.
We think that what is happening today will go on forever. The Egyptians thought that. The Greek thought that. The Romans thought that. The Germans thought that. The Russians thought that. What if the world stopped trading with us? What if China and Russia fight a war with us and win? What if internal warfare created a collapse of our current Government and it's systems and we no longer could simply print money to survive? In other words, the Communists win from within our boarders? We just went through a large issuing of dollars, trillions, and it caused hyper inflation for a short period of time. Next time, it may not be so short of a period. It's funny how Democrats used to praise Bill Clinton for having a surplus and we had no national debt. Now, it seems to be okay?
....
That's a lot of gobbledygook.
The stimulus packages in 2020 and 2021 didn't result in hyperinflation. It's important to distinguish between inflation, a general increase in prices, and hyperinflation, a rapid and typically escalating inflation. According to the International Monetary Fund (IMF), hyperinflation is generally characterized as a period where the inflation rate exceeds 50% per month.
en.wikipedia.org
While there was indeed an uptick in inflation in 2020 and 2021, it was far from hyperinflation. There were increases in inflation due to supply chain disruptions, enhanced demand as economies reopened, and to some extent, and yes, increased money supply due to stimulus packages. These were unprecedented responses to the extraordinary economic crisis prompted by the COVID-19 pandemic. However, that wasn't "hyperinflation" and there are ways our federal government can intervene in inflation.
The U.S. federal government can intervene in inflation in several ways, often through the Federal Reserve and fiscal policy.
- Monetary Policy: The Federal Reserve uses several monetary policy tools to control inflation. The most commonly used are the Federal Funds Rate (the interest rate at which banks lend reserve balances to other banks overnight) and open market operations (buying and selling government bonds to regulate money supply).
If the Fed sees that inflation is rising above its target rate (currently around 2% annually), it can raise the Federal Funds Rate, making borrowing more expensive and slowing down economic activity. It can also sell government bonds to decrease the money supply. These actions can help to curb inflation.
- CPI Home : U.S. Bureau of Labor Statistics ↩ 2% annually stat-source.
- Fiscal Policy: The federal government can adjust its spending and taxation policies. If the government reduces spending (contractionary fiscal policy) or increases taxes, this can decrease demand in the economy, lowering price pressures and thus reducing inflation.
- Regulatory Policy: The government can use regulatory policy to affect supply chains and competition. For instance, if inflation is due to supply chain disruptions, the government can work to streamline these processes. If a lack of competition in a certain sector is causing price increases, the government can enforce antitrust laws to promote competition.
- Incomes Policy: Incomes policies, such as wage and price controls, can be used. These types of controls were last used in the U.S. during the 1970s and are typically seen as a last resort.
- Macroprudential Policy: The government can regulate the financial sector to prevent excessive borrowing and speculative bubbles, which can lead to inflation. This involves monitoring and managing systemic risks.
- Communication: The Fed uses communication as a tool to shape expectations about future inflation. If businesses, consumers, and investors expect the Fed to maintain low inflation, they're likely to make decisions that help achieve that outcome.
Hyperinflation historically only occurs when a country's economic output (its GDP) is critically compromised, and the government responds by printing money to cover its debts. Examples include Zimbabwe in the 2000s and Weimar Germany in the 1920s. In contrast, the U.S. and other developed economies have been able to substantially increase their money supply without inducing hyperinflation during the pandemic. The US isn't Zimbabwe or the Weimar Republican.
According to the U.S. Bureau of Labor Statistics, the Consumer Price Index for All Urban Consumers (CPI-U) rose 7.0% from December 2020 to December 2021.
This increase is significantly lower than the 50% per month inflation rate synonymous with hyperinflation. The inflation observed was primarily driven by supply chain disruptions and a surge in demand as economies reopened, factors expected to be temporary.
Inflation isn't solely a monetary phenomenon but is also driven by real factors like supply chain disruptions, labor market conditions, and future inflation expectations. The Fed can influence these factors to some extent through its monetary policy tools, but it's not the sole or primary driver of inflation.
