Economics question regarding the relationship between the relatively high purchasing power of the "developed nations" and the debts (sovereign and other) of the so called "developing nations". If the Make Poverty History campaigns to cancel debts of developing nations are successful will this result in a noticeable reduction in the purchasing power of average people in "creditor nations" like the UK, USA, Germany, etc? [more inside]
posted by mary8nne
on Jul 16, 2013 -
The US states are massively in debt, and public-sector layoffs are causing unemployment to stay high, even while the private sector recovers.
The Federal Reserve can create dollars from nothing, and at the moment inflation is apparently a minor concern compared to deflation.
What would happen if the Federal Reserve assumed much or all of the debt of the states? They could pay off the debts ex nihilo at a speed of their choosing, while allowing the states to create or save jobs. They could also simply grant money to those states that have relatively little debt. Does anything like this happen, and should it? [Not an economist]
posted by East Manitoba Regional Junior Kabaddi Champion '94
on Sep 14, 2010 -