NEIL IRWIN (it's Neil Irwin day!) recently discussed Paul Ryan's views of potential inflation in America:

Unless we change course, we will have a debt crisis. Pressed for cash, the government will take the easy way out: It will crank up the printing presses. The final stage of this intergenerational theft will be the debasement of our currency. Government will cheat us of our just rewards. Our finances will collapse. The economy will stall. The safety net will unravel. And the most vulnerable will suffer.

As my colleague points out, Mr Irwin essentially writes this off as a non-possibility. My colleague isn't quite willing to do so. He says:

The full story in the event of a hyperinflationary catastrophe is far too complex to predict, but it's fun to think about how it might go. Here's my very rudimentary sense of things. Why would America, if "pressed for cash", as Mr Ryan puts it, start financing its spending through rapid inflation? Probably because the cost of issuing new debt (currently a relatively cheap option) had become too dear. But then the Treasury's credit rating would tank even further, and the cost of borrowing would become really prohibitive, forcing the government to finance new spending mainly through new revenue. But runaway inflation would quickly kill the real value of any taxes collected, no matter how high rates are jacked up. So, assuming Americans won't contemplate anything like selling the Grand Canyon to a consortium of sheiks (in euros, or gold-pressed latinum), it would become simply impossible to finance Social Security and Medicare at current real levels. There is, sorry to say, no legal entitlement to social-insurance transfers, so the government would violate no law by backing out of its promises. Should the hallowed institutions of the American state somehow manage to survive a hyperinflationary cataclysm, presumably Congress would simply scrap the inflation-indexing of Social Security, and/or continue to mail cheques that America's seniors and health-care providers will find good mainly for kindling, or a laugh. That's how the safety net unravels. There's no way to continue to pay for it, so it stops being paid for, and so it goes away.

So, I'd like to make one mundane point and one important point. The mundane point is that it's important to remember the difference between real and nominal. Runaway inflation can only limit the government's ability to distribute real resources to the extent that it destroys the economy's ability to generate real resources. That is, if the power of the penionser lobby is so extraordinarily great that it can bring America to destroy itself with hyperinflation, then hyperinflation won't necessarily end pensioners' ability to extract benefits from the rest of us. The government can just mandate free health care and food rations for the retired, who can then go to the hospital or the food depot and demand their share. Their share will be a portion of a much smaller pie, as hyperinflation would largely destroy the economy's capacity to produce real goods. But they'll still get theirs.

That mundane point helps illustrate the more important point, which is that hyperinflation is really, really, really unlikely to occur in America. We can talk about how American government is gridlocked and Congress is robbing future generations by accumulating massive debts, but the fact remains that the development of hyperinflation in America implies a breakdown in governance so complete that a single man or interest can drive everyone else to destitution in order to keep its share of the spoils from shrinking. This, in a country where the government freaked out about the deficit and almost instantly balanced the budget in the 1990s, in response to a 10-year Treasury rate just a shade above 7%, and in which the government is freaking out about the debt and actively reducing the deficit now despite a 10-year Treasury rate around 2%.

Look, I wouldn't be surprised at all if American financial mismanagement led the country to behave irresponsibly, or to end up with a higher rate of inflation. It could inflate, or inflate and repress, or even partially default (on statutory obligations if not on bond payments). I don't know that I see inflation and financial repression as the most probable route out of high debt (which, in my view, will instead consist mostly of mild austerity and growth). But it's none of it out of the question.

By hyperinflation is a different animal, and one which implies a complete breakdown in the political and social order. America is actually very different from Zimbabwe. Yes, America occasionally budgets recklessly. But it has a very deep, very broad, and very strong civil society, buttressed by levels upon levels of private and public, formal and informal institutions. These institutions, and many like them across rich economies, are generally very good at preventing governments from doing disastrous things. To extrapolate from the admittedly ugly scene on Capitol Hill to hyperinflation is to misunderstand what it is, fundamentally, that makes American democracy work: a strong system of civil, social, and political norms that defines acceptable political behaviour and which reacts strongly to deviations from that behaviour. Now, sometimes we might not like the norms that these institutions reinforce. They might tolerate institutional racism for long stretches of time. They might not adequately take account of the costs of climate change. Or they might just be too damn liberal, for some tastes anyway. But it is the strength of these institutions, that work to advance a vague but meaningful conception of the greater societal good, that keeps the wilder impulses in check.

Hyperinflation is not an economic outcome. It isn't something that emerges, mechanically, from some macroeconomic process gone wrong. It is a symptom of total social and political collapse. And while it would be unwise to say that it could never happen in America, it is simply mistaken to say that it could happen because Congress was too foolish to balance its budget.

To put things a different way: Paul Ryan is wrong that bad budgeting will lead to hyperinflation. It won't. Bad budgeting will eventually lead to circumstances, most likely higher interest rates, that convince legislators to end bad budgeting (or to budget badly in a different way). The fact that Mr Ryan is left warning about hyperinflation rather than leading the charge for the new, better bad budget simply suggests that his approach is less consistent with the norms American civil society holds dear than available alternatives.