All Western countries are devaluing their currency. No other way to reduce the debt. Cutting benefits is political suicide. Taking every dollar from billionaires would knock a 1 year of debt off. The solution is inflation
The response is inflation. It would only be a solution if it works, and of all the countries or empires that tried it in the past you'd be hard pressed to find one that succeeded at correcting their economy long term by debasing their own currency.
The interplay between bond yields, the fed funds rate, and inflation can lead to weird situations. Right noe the Fed is having to lower rates because (a) job numbers are pretty bad and (b) the US debt is held in a surprising number of short term bonds and higher rates make the debt just rack up faster. They're also watching inflation continue to chug along higher than their 2% target though, a scenario they'd normally raise rates for.
I won't be surprised if we ultimately realize that, in the end, those in charge had way less control of the economy than they like to claim. I'm biased though, that's always been my view and it frustrates me that economics claims to be a field of science at all. It can be a very interesting and important historical analysis but it isn't predictive, and at the level of macroeconomics it can't realistically be isolated and tested.
Either you lower US standard of living to match the countries it is currently outsourcing to or you establish protectionism and isolationist policies with a focus on total efficiency rather than short-term gains.
The devaluation of the dollar relative to other currencies will eventually make it profitable for work to move to the US.
I think we're not seeing that yet because there's an imperfect coupling between asset price inflation, consumer price inflation, and exchange rates.
The only way its a long term solution is if globalization is so fundamentally different from what other countries and empires have felt with that they can actually devalue at just the right rate to bring work back here.
Getting that rate right seems like a tiny needle to thread though, and that only works if this situation is different from when other currencies were devalued intentionally.
Yes it has. Euro costs 10% more in USD than one year ago
But more or less only the euro. The USD has strengthened or held steady against INR, RMB, CAD, AUD, etc. The euro is strengthening even more, however.
By those metrics the dollar has lost a lot of value in the last year
Once Diwali ended a couple weeks ago, Gold prices slumped [2].
The same thing happened with Silver [3].
You used to see similar stuff happen around CNY back when China was growing at double digit speeds [4].
[0] - https://www.cnbc.com/amp/2025/10/27/indians-spend-up-to-11-b...
[1] - https://www.reuters.com/world/india/winners-losers-indias-sw...
[2] - https://www.bloomberg.com/news/articles/2025-10-20/gold-s-re...
[3] - https://www.bloomberg.com/news/articles/2025-10-18/sold-out-...
[4] - https://ecomod.net/system/files/gold_and_china_ecomod2013.pd...
The dollar is being devalued every time more money is injected into the system, either by government printing or banks printing more money via unsecured debt. When the total amount of currency in circulation goes up my money was devalued, prices will always go up when the money supply increases.
I was pointing out somewhat pedantically that 'devalued' has a specific meaning and 'to lose purchasing power' is not it.
> When the total amount of currency in circulation goes up my money was devalued, prices will always go up when the money supply increases.
If you got more of that money to cover increased costs then it wouldn't be a problem, so it really only matters if you don't get a bump in income that covers the decrease in purchasing power.
The problem is not money supply increasing -- it is that it is being misallocated. The money supply has to increase in order for economies to grow otherwise it would deflate, and that cause all sorts of worse problems.
I view the increase in money supply a core issue that harms all of us. Yes, it wouldn't technically matter if all of us received the new money in a perfect allocation based on the amount of money we currently hold - if I have $100 and the supply increases by 2% I'm fine if I now have $102. It never works like that though, and never will.
Allocation is only one of the challenges to deal with when debasing the currency by increasing supply.
You increase the debt when you are devaluing your currency.