Well if you do the thought experiment of printing a million dollars and giving each American a million dollars then you can clearly see that there will be really high inflation such that the value of the dollar will plummet. That is what they are worried about. But they make it out to be a bigger problem than it is. Japan has a much higher debt than we do but they are not collapsing.
Indeed, and there is a tool for that (inflation). It's called taxation, which removes money from the system. Although, to be honest, the kind of event that you describe (a one-time injection of a ton of money) really wouldn't be that problematic. Inflation is a problem, because it means that prices are
consistently rising
over time. This causes waste because it requires time and effort for businesses to constantly adjust prices. As well, it creates perverse incentives to spend immediately in order to maximize what can be obtained for money that is expected to be able to command less real goods and services tomorrow or the next week. While a one-time injection of a ton of money would have a cost, in that businesses would definitely have to adjust prices, if there were no further injections, the cost really wouldn't be that bad. Consider that the prices of things would just have a bunch of zeros on them, but otherwise nothing would change.
Prices are social constructs that are arbitrary. It really doesn't matter if the price of something is $1,000,000 or $1. What matters is that the price is not
consistently changing. That's why the Federal Reserve's mission is phrased in terms of price
stability. Obviously, I'm not suggesting that what you describe should be done, because it doesn't actually change anything other than the number of zeros that go on the end of prices. Assuming the government gave everybody the same amount of money, the distribution of income, wealth, and resources would remain completely unchanged. Vendors would just have to break out their sharpies to add in the extra zeros to all the prices. I'm writing all this to try to illuminate what inflation is and why we worry about it. Of course, while inflation has costs for a society, unemployment has even more costs.
And I agree that we need to get things under control but unlike the GOP, I go for a compromise solution with both tax increases and benefit cuts. Medicare needs to be put under some control . . . we spend on people as if they will live forever. We have to start admitting that people get old and die. We should not be buying 90 year olds knee replacements.
So you want double austerity now? For what purpose?
You have to be able to articulate a reason for using the government to intentionally make people poorer. Not only do you propose reducing people's financial savings with increased taxation but also, at the same time, denying them goods and services related to their health. What is the reason for this? Are you anticipating inflation? And, if so, on what basis? We have over 8% unemployment!
