Where do those nominal dollars come from?

Nominal gross domestic product in blue and federal debt in red.  The blue line is the principal from loans made by the red line. is this sound banking?

No. It is not the job of the legislature to loan fiat into the economy, it is the job of the currency banker to lose and gain money into the economy, over much shorter periods. What we are doing is running for an entire generation until prices revert back to zero inflation over the period.



If the legislature in DC were to act like a member bank, then fine. We voters might even give it a break now and then on losses made over a three year period, for example. But the legislature is making 40 year bets here, that is impossible to track. The legislature has made its fill of forty year bets and the economy will wait to see which ones pay off.

Currency banking works just like the coupon business in grocery stores.  The coupon printer is supposed to lose and gain coupons on a short term basis to balance inventory flows.  But the key is short term. The currency banker should be losing and gaining money on much shorter periods, periods that correspond to the price equalization period, something like two quarters. Inflation and deflation should lokk like a short term Wiener process.