How much inflation? That's the key. A small steady inflation can be sustained, though we may eventually, for convenience, be forced to redefine a dollar. What can't be tolerated is a small steady deflation! Fleckenstein pointed out many times that we were planning on inflating away the debt. Well of course realistically we can never inflate it all away. What he meant was we would reduce the real interest on debt by paying it back with dollars that had less buying power than the dollars borrowed. This is of course true. And if we were to pay back our debt with dollars that were so deflated in value that the cost of debt were reversed onto creditors then those in debt would profit handsomely. But what creditor would allow you to do that more than once? I suppose we should ask the Argentines. But there are myriad practical ways to profit from debt if one invests borrowed money in ways that produce an increase in productivity. That holds for both the private and public sectors. The best we can hope to do is to have an exactly balanced, government budget. We can't suffer a surplus for very long, as repeated small, or a few large surpluses, would throw the country into recession. In actual practice what we will do, if the budget is managed properly, is run more or less continuous small deficits, and larger deficits due mostly to public sector investment. The critical factor is productivity. We must maintain a proper balance between readily spendable, liquid money and productivity -- Not easy, But we seem to be managing so far.