Quantitative easing is an incomplete strategy that must be accompanied by the nullification of debt

TL;DR

The paper proposes nullifying debt as a discontinuous alternative to quantitative easing, aiming to eliminate debt sustainably without causing hyperinflation or bloated central bank balance sheets.

Contribution

It introduces a novel debt nullification approach as an alternative to quantitative easing, addressing the exponential growth of debt due to compound interest and inflation.

Findings

Debt nullification can eliminate debt without hyperinflation.

Quantitative easing alone is insufficient for sustainable debt management.

Nullification offers a politically feasible debt reduction method.

Abstract

Compound interest as well as inflation grows exponentially with time, whereas other means to repay debt grow polynomially. For this and other, mostly political, reasons, debt without inflation is unsustainable. We suggest a discontinuous way to eliminate debt by nullifying it. This scenario is preferable to current central bank strategies of quantitative easing because it allows the disposal of debt without hyperinflation or bloated balance sheets.