Hyperinflation
Hyperinflation is an economic phenomenon where the value of money rapidly decreases. Sometimes an economic shock or loss in faith in the government can lead to a positive feedback cycle where the price of goods and services rises very rapidly.
The classic example of hyperinflation is in Germany following World War I, when the Weimar Republic printed money to cover its debts.
In the United States, the Federal Reserve raises interest rates every time inflation seems about to go out of control. This strategy is not without drawbacks, as it suppresses economic activity and lowers employment when cheap money is no longer available. It also makes it more expensive for the federal government to service the national debt, which could become a serious problem as the debt balloons to huge sums and interest payments eat up a larger share of the federal budget. Elon Musk and others warn that this could lead to catastrophe in the future.
The Inflation Reduction Act, under Joe Biden, paradoxically raised the national debt and lead to inflation. In the United States, both parties use the tactic of borrowing and spending to deliver short term happiness while deferring the pain of fiscal responsibility to the next generation.
On the other hand, some economists argue that binge spending induces enough new activity for the economy to grow its way out of the debt problem. Although this has somewhat worked in the past, historically it has never been a viable long-term strategy.
Fiscal hardliners, or fiscal hawks, are sometimes said to be arguing for austerity, in which government spending is reduced and then prices fall naturally, because there is less money floating around to spend on goods and services.
The Gold standard has been touted as a way to avoid hyperinflation. It works somewhat, but restricts what the Federal Reserve can do to control the economy. Gold can also be mined at a higher rate as economic conditions change, favoring those who have access to the metal, which is somewhat arbitrary.
Cryptocurrency has been touted as an alternative, with energy poured into a digital mining process rather than obtaining metal or other physical stores of value. In practice, crypto prices seem to fluctuate with the general economic outlook along with other speculative assets.