–If governments can not pay for debts through taxes, they can print money to finance debts.
–Seignoirageis paying for real goods and services by printing money.
–Seignoirage generally leads to high inflation.
–High inflation reduces the real value of debt that the government has to repay and acts as a “tax” on lenders.
–High and variable inflation is costly to society; unstable output and employment is also costly.