Is the Government Ready to Collapse?

A lot of anarchists think we are at the end of the road for government but states have more tricks up their sleeve. Especially the US government. We see South American Governments go into collapse all the time because of debt but there is a major difference between the US and them. The US only borrows in its own fiat currency. That's not the case in many other places.

One quick inflationary event can kick the can pretty far down the road for government debt. The trick is wait until the absolute last possible moment, to get the most money borrowed and spent possible, then inflate. It doesn't have to be any kind of hyper inflation either. At 10% rate of inflation cuts US government debt in half in 7.5 years. A 13% rate of inflation does it in 3.5 years.

What I mean is, get all of the capital spending out of the way before the inflation. All new roads, bridges, government buildings, military jets, etc. So that it can cut the cost of those things in half and not have to pay for them later, at full price, with the high interest rates that follow an inflation event. It also helps to convert a larger portion of the debt from short term to long term instruments.

The losers in this game are the people holding government debt. Actually the effect doesn't just happen to government debt. It applies to all fix rate loans. The winner are everyone who is in debt, at a fixed rate. To a lesser degree, even those with variable rates will win because interest rates lag inflation. That's because inflation happens by the federal reserve buying debt, which pushes interest rates down.

Another life extending trick: Governments have, many times, cut spending or at least cut the growth rate of spending enough so that the economy grows faster than it. Everyone thinks it's impossible but it's an old thing. Julius Caesar did it and Rome made it another 700 years. More recently, Scandinavia did it and so did Canada.