When national debt grows faster than the economy for long enough, monetary policy stops targeting price stability and starts just keeping the financial system alive. At that point, the math forces governments toward expansion, credit creation, and currency debasement. It's not a choice anymore.
We're living in what's called a fiscally dominant regime. That sounds technical, but the idea is very simple. Debt has grown faster than real economic output for a long time. And once an economy reaches that point, monetary policy stops being about stability and starts being about survival. Governments don't have the option to meaningfully pay the debt down. So what's left is expansion, credit creation, currency debasement, not because policymakers want to, but because the math leaves them with no alternative. Subscribe if you want more content like this.
