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Bernanke's World War II Monetary Regime

Published: 25 Mar 2013

When a government spends beyond its means, the options for paying for the spree are unattractive. It can burden the populace with higher taxes, or it can wipe out a portion of creditors' wealth by inflating the money supply, repaying debts with a debased currency. Or it can do both. The United States is avoiding these choices by borrowing enormous sums, bringing federal debt to almost $17 trillion, at interest rates that the Federal Reserve has managed to keep very low. For now.

-Article by Reuven Brenner and Martin Fridson

Read full article (subscription required): The Wall Street Journal, March 25, 2013

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