Excessive borrowing leads to inflation
Excessive borrowing – whether by the Federal Reserve or by private banks – to spend domestically can destroy the economy with high inflation.
We tried in the past. Many countries already tried, believing that banknotes are equivalent to hard work. It worked for a while, but it didn’t last. In the 1920s, Germany collapsed in hyperinflation. During the 1970s, the loose monetary policies derailed the economy and many workers were pushed out of their jobs.
Borrowing remains the printing of inert paper banknotes. There are no goods behind these freshly printed banknotes. Someone has to work hard and fast to create as many new goods as new banknotes. Otherwise, the numerous banknotes will be devalued compared to the scarce goods, and the savings of the people will be wiped out by inflation.
Hard work is the base of the economy, not the “monetary illusion” of paper banknotes. It is a dangerous illusion to believe that borrowing will pay for all green goods, as they don’t exist yet.