Interesting insight from clovisdad, a commenter on another website:
Let's use Japan as an example. Cutting through the "old language" of bonds and interest rates, bond vigilantes, taxes and balanced budgets, the Japanese (Bank of Japan) has concluded it can simply print all the money the government needs to borrow; and it does.
So now what's wrong with deficits? Well, we all know that too much money chasing too few goods would cause inflation, but there's not a lot of that. Why not? Because these economic policies murder savers, so people are forced to cut back on their purchases and contract their lifestyles, thus no inflation; while the government feasts on cheap debt for its ever expanding power..
The real consequence is that government has found an unbounded means of expansion on the backs of the citizens, who are thereby proportionately impoverished.
There is no free lunch; but governments, including our own, are now eating ours.
