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Here’s a letter to the New York Times:
One of Pres. Obama’s economic advisors explained to David Einhorn that the U.S. government is unlikely to default on its debt because (as Mr. Einhorn summarizes the proffered explanation) “the government is different from financial institutions because it can print money” (“Easy Money, Hard Truths [2],” May 27).
Mr. Einhorn understandably isn’t comforted. After all, had this White House official elaborated a bit more, his explanation would have been this: ‘the government is different from financial institutions because it can print money – a practice which, by reducing the dollar’s purchasing power, means that Uncle Sam can unilaterally and secretively filch from every person and institution holding dollars whatever resources it needs to pay its creditors.’
Sincerely,
Donald J. Boudreaux
Of course, inflation’s evils go well beyond its surreptitious transfer of wealth from dollar-holders to the inflating-government. And government’s ability to put a gun to people’s heads in order to get resources directly – more above board – is another reason that “the government is different from financial institutions.”