> the TA said “yeah I guess repaying debt is like destroying money” as if they had never thought of that before
replyThey shouldn't have been a TA. Modern money is destroyed in three ways: through taxation, defaults and the extinguishing of debts.
Taxation destroys money?
replyAnd when debt is wiped out through bankruptcy that inflation remains.
reply> when debt is wiped out through bankruptcy that inflation remains
replyBankruptcy is deflationary. The same way credit creation makes money bankruptcy (and any other reduction of debt, including through repayment) destroys it. It's why financial crises were often followed by deflation in gold-based economies.