Deficit spending acts as a hidden tax via inflation. This tax disproportionately harms those without assets while benefiting the small percentage of the population owning assets like stocks and real estate. Therefore, supporting deficit spending is an active choice to make the rich richer and the poor poorer.

The K-shaped economy and extreme wealth disparity are primarily caused by modern monetary theory and deficit spending, which inflates asset prices. This central bank-enabled system is a more fundamental problem than the existence of wealthy individuals.

To fund deficits, the government prints money, causing inflation that devalues cash and wages. This acts as a hidden tax on the poor and middle class. Meanwhile, the wealthy, who own assets like stocks and real estate that appreciate with inflation, are protected and see their wealth grow, widening the economic divide.

Due to massive government debt, the Fed's tools work paradoxically. Raising rates increases the deficit via higher interest payments, which is stimulative. Cutting rates is also inherently stimulative. The Fed is no longer controlling inflation but merely choosing the path through which it occurs.

Unlike other countries, the U.S. can't truly become insolvent because, as the world's reserve currency, it can always print more dollars to pay its debts. The actual danger is that the government will devalue the currency through inflation, effectively stealing purchasing power from everyone.

The Fed's tool of raising interest rates is designed to slow bank lending. However, when inflation is driven by massive government deficits, this tool backfires. Higher rates increase the government's interest payments, forcing it to cover a larger deficit, which can lead to more money printing—the root cause of the inflation in the first place.

While U.S. households and corporations have deleveraged, government debt has exploded, making private credit more attractive. This creates a hidden risk: the deleveraged private sector has immense capacity to borrow once inflation returns, which could trigger a massive, uncontrollable demand-pull inflation shock.

As the world's reserve currency, the US can always print money to cover its debts and avoid a technical default. The true danger is not insolvency but the resulting hyperinflation, which devalues the dollar and silently erodes the purchasing power of everyone holding it, both domestically and globally.

Fiscal irresponsibility forces money printing, devaluing the dollar. This inflates asset prices, enriching the few who own assets (like stocks and real estate) while impoverishing the majority who live on income. This widening wealth gap fuels the populist anger and social division that manifests as civil unrest.