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should the US consider a currency redenomination? (lemmy.zip)

submitted 10 months ago by shortwavesurfer@lemmy.zip to c/personalfinance@lemmy.ml

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Prices of things are becoming absolutely insane. $800+ rent, $30,000 cars, $10 sub sandwiches, etc. It would be nice to do a 3/1 split and cut everything by 2/3. Then we would have $266 rent, $10,000 cars, and $3.33 sub sandwiches. Wages, debts, everything would drop to 1/3 what they are now. It would also make coins useful again since a vending machine soda would be 2 quarters again.

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[–] urist@lemmy.blahaj.zone 2 points 10 months ago (1 children)

I’m not understanding….

You do realize if you cut all dollar values to be 1/3 of the original value, the national debt becomes:

33 trillion * 1/3 = 11 trillion

This number is still unimaginably large, no?

I really wouldn’t worry about the debt. All nations have debt, and I bet the USAs debit-to-gdp ratio isn’t that bad (been a while since I paid attention to those numbers though).

[–] shortwavesurfer@lemmy.zip 1 points 10 months ago (1 children)

I think I read somewhere that the debt to GDP ratio was something like 150% currently.

[–] urist@lemmy.blahaj.zone 1 points 10 months ago (1 children)

Sorry, I failed to finish my whole thought there.

Debt to gdp ratio is probably pretty average in comparison to other nations (admittedly this is a figure I have not looked up in a while). The yardstick we should use to measure how bad our debts are should be other economies. Government debt is nothing like the debt of private citizens.

[–] shortwavesurfer@lemmy.zip 1 points 10 months ago (1 children)

I haven't looked up what other countries debt to GDP ratios are, but if they are similar, at say, 150% then won't we just end up in a scenario where the entire world crashes and burns and the average citizens all over the world are put out onto the streets? To my knowledge, the crazy circus can't go on forever.

[–] urist@lemmy.blahaj.zone 1 points 10 months ago (1 children)

No, that only happens if countries stop being able to make good on their loans. To my knowledge most USA debt is owned by USA citizens and corporations in the form of bonds. Nations aren’t just loaning each ofher money they don’t have.

[–] shortwavesurfer@lemmy.zip 1 points 10 months ago (1 children)

But the United States is getting to a point where they will not be able to make good on their loans unless they print more money, which will then cause inflation and make the dollars they repay the loan with worth less to the person/company/country who made the loan. We already pay more on our debt than we spend on the military and considering the US cannot stay out of other people's business, that's saying something.

[–] urist@lemmy.blahaj.zone 1 points 10 months ago (1 children)

But the United States is getting to a point where they will not be able to make good on their loans unless they print more money,

I’m sorry but to convince me you’d have to find a VERY good source for that claim. Government bonds are the safest bet in the game for a reason. The situation you’re describing would be a global collapse of most economies.

Anyway, you seem very interested in this topic, I hope you find the answers you’re looking for, but I think that wraps this conversation up for me.

[–] shortwavesurfer@lemmy.zip 1 points 10 months ago

I do find it to be a very interesting topic, and you were a great discussion partner.