And the Fed has made a total hash of it.
If the Fed kept the money supply stable, the government would have to go to the markets for its borrowing. Absent Fed manipulation of the interest rate, the cost to borrow would be much higher than now.
I realize that's no guarantee it wouldn't overspend, but the crisis would come much sooner. As it is now, the borrowing is next to costless [to the government]. There is a cost, of course, but we pay it through lost purchasing power.
Ah yes, our run away hyperinflation that we hear so much of on these threads --straight out of 'shadowstats':
It's a crock. There is no inflation -hyper or non-hyper- and that's the point of the article. We've got a very serious threat of deflation --far worse than inflaion-- something brutally clear with the collapse of comodity prices.