Many productive people have gotten suckered into the debt trap too. Not to mention many people who never took out debts that couldn’t sustain will see their mortgages go underwater too as overall real estate prices decrease.
My career was spent in finance and commercial real estate. One of the reasons I left the industry when I did is I knew it was coming. I didn’t know when but I knew California had begun its collapse by late 2006. I got out in time. Many people didn’t
It was the system itself that was sick and the problem is that all of America’s economic energy got tangled up with the investments. That’s why it albatrossed our economy. You may not like inflation. I don’t. I stand to lose a very large nest egg with high inflation. But that high inflation may be necessary to keep the country from collapsing.
Like the Weimar Republic? High inflation will raise the costs of goods and services and the cost of government.
There are over 60 million people on Medicaid, 45 million on Medicare, and 50 million on SS (including DI). Consider what COLA increases will do to SS and the fact that 10,000 people a day are turning 65 and will continue to do so for the next 20 years. What happens to interest rates to finance our debt? 43 cents of every federal dollar spent is borrowed. And inflation will cause interest rates to rise along with energy costs, i.e., 70% of our oil is imported. Inflation will destroy this country just as much if not more than deflation.
High inflation IS the country collapsing. Devaluing currency is cheating, an unfair way of paying off debts: reducing the amount owed by reducing the value of the payments. If long-term agreements cannot rely on stable currency value, the agreements collapse and take the related economic infrastructure with them.