The Saver s Dilemma

The progression is clear first came rescue of private firms, and now comes the rescue of the rescuers i.e., governments.

And a higher debt America is one in which savers and lenders would have a justified greater fear that the government would resort to inflation in order to repudiate part of its outstanding debt.

The Federal Reserve would then have to fight inflation putting upward pressure on unemployment in order to reassure savers and lenders of its willingness to guard price stability.