If the US Congress couldn't deficit spend, would their economy fail?

Question

I'm talking about the present.

If the Fed couldn't just print up more fiat money to pay our debts, would the US crash?

Answer 1

If the Feds printed up more money to compensate for outrageous spending, of course the economy would fail. The dollar's value would drop like a brick. We'd all be screwed over worse than the Mexicans and their pesos.

Answer 2

No, but the economy would be far less flexible and you would see more personal and business bankruptcies and you would see permanently higher interest rates.

Answer 3

The deficit is bad for the economy   over time, but balancing the budget might cause short term pain. The deficit is not necessary for the fed to expand the money supply, and fed policy is to increase the money about  1 or 2 percent  over GDP growth rate to prevent deflation, which is bad for the economy. The government has more than enough debt to monetize so does not need to create new debt.

Answer 4

Congressmen's economy never fails.

Answer 5

In the last years of Clinton's administration and the first year of W's, the US congress didn't deficit spend.  And their economy didn't fail.  It wasn't until W decided to run a war and a huge tax cut to the rich that the deficits came back.

Answer 6

Apparently not.  We weren't always in a defecit.