|
Ardennes posted:One issue is that the US could very well sustain deficits either from bonds or simply printing (ie increasing the money supply) more than any other economy on earth because we are the largest reserve currency. Other countries NEED to purchase dollars which essentially subsidizing their relative worth. It doesn't matter that a country is sovereign or not (it helps obviously) but that other countries are willing to absorb their currency in exchange. the key problem is that the USD might lose its reserve status within the next few decades as is, this trend speeds up if monetizing the federal budget on a structural basis creates expectations of currency volatility
|
#
¿
Feb 2, 2019 09:19
|
|
|
|
| # ¿ May 15, 2024 17:40 |
|
|
MixMastaTJ posted:Our level of deficit spending would suggest a 5 cent annual rate of inflation. where are you getting this from?
|
|
#
¿
Feb 2, 2019 19:59
|
|
|
also isn't MMT just the same idea advocated by Social Credit Parties (who ran on printing money and give it to people/pay for programs) from the mid 20th century given a fancier name?
|
|
#
¿
Feb 2, 2019 20:02
|
|
|
from a pure political mechanism perspective MMT also demonstrates how dysfunctional the US system is that we are basically talking about relegating the responsibility of revenue raising from an elected legislature to an unelected technocratic institution
|
|
#
¿
Feb 15, 2019 19:49
|
|
|
Infinite Karma posted:Inflation is a good thing, because it eases debts and increases liquidity in the economy. It also devalues savings and capital, while not devaluing labor (hypothetically), transferring power from the haves to the have-nots. Those are politically loaded statements, but are still good faith arguments, even if you don't want that outcome. How does it devalue capital but not labor? One of the major intended consequences of inflation is to give employers "flexibility" in adjusting worker salaries. Basically everyone gets auto-wage cut of 2-4% a year without rioting in the streets, since people get pissed at direct cuts to their salary of 2% a year but "oh you got a 1% raise instead of 2%" is likely to be brushed off more easily. and how does it devalue capital exactly? Asset prices, short of very liquid asset like cash, rise with inflation. Inflation screws over people with savings in liquid assets but is neutral or reward people with "harder" assets like housing or stock shares. Poor people have very little of the latter. The reason why some low rates inflation is good is because macroeconomics, namely that inflation encourages consumption and investment and -deflation- leads to very nasty consequences as the 1930s demonstrated. Typo fucked around with this message at 22:18 on Feb 15, 2019 |
|
#
¿
Feb 15, 2019 22:00
|
|
|
Infinite Karma posted:Having the government "fiat" its way into building out infrastructure (instead of "borrowing" it, i.e. enriching finance companies in a shell game) is a huge win for available resources that will offset inflation. What the gently caress does this even mean
|
|
#
¿
Mar 6, 2019 21:55
|
|
|
MixMastaTJ posted:
isn't that actually deflationary? Since you are reducing consumption more than the money in circulation?
|
|
#
¿
Mar 6, 2019 23:21
|
|
|
taxes can cause inflation if you assume there's no propensity to consume at the individual/household level and you take the money and the government spends it
|
|
#
¿
Mar 6, 2019 23:28
|
|
|
MixMastaTJ posted:While on a local level the cost for a widget might drop quote:overall the goods and services available in the economy will drop, meaning each dollar now has less spending power. The problem is that when you combine the two, you get a deflationary spiral, because goods and services in the economy drop, people's income drop (people lose their jobs etc) so they have less money to spend, and are less willing to spend money. So prices for goods drop further and the net result is still deflationary. That's why in recessions (goods/services drop) you tend to get zero inflation or deflation, while in boom times inflation increases. https://www.investopedia.com/terms/d/deflationary-spiral.asp quote:A deflationary spiral typically occurs during periods of economic crisis, such as a recession or depression, as economic output slows and demand for investment and consumption dries up. This may lead to an overall decline in asset prices as producers are forced to liquidate inventories that people no longer want to buy. Consumers and businesses alike begin holding on to liquid money reserves to cushion against further financial loss. As more money is saved, less money is spent, further decreasing aggregate demand. At this point, people's expectations regarding future inflation are also lowered and they begin to hoard money. Consumers have less incentive to spend money today when they can reasonably expect that their money will have more purchasing power tomorrow. This btw is exactly why deflation is way worse than inflation for the average person who needs a job. Typo fucked around with this message at 07:23 on Mar 7, 2019 |
|
#
¿
Mar 7, 2019 07:19
|
|
|
Splode posted:Germany was not a wealthy power in the 1920s, and certainly wasn't the economic powerhouse it is today. The hyperinflation was just one symptom of many that came from the government disintegrating. I highly recommend The Wages Of Destruction if ww2 and economics are your cup of tea. hyperinflation was intentional because the government was trying to use it as a way of not paying reparations to the allied powers
|
|
#
¿
Mar 7, 2019 07:53
|
|
|
MixMastaTJ posted:I think, though, if you were looking at it from the perspective of some other currency, which remains stable, the spending power of the resceeding dollar would drop? Like, if a business typically takes Euros or USD and they see the US in a deflationary cycle they would require more USD for their goods while the price in Euros would remain stable. I edited because I think I'm not sure if I understand this statement correctly specifically, what do you mean by "their" goods, goods produced in the US being sold to Europe, or goods produced by Europe sold to the US? because what you seem to be getting into is the effect currency evaluation and devaluation has on international trade quote:It seems intuitive to me that GDP dropping with a constant amount of currency would cause inflation but maybe I'm off base. The key equation in quantitative theory of money is: MV=PQ https://en.wikipedia.org/wiki/Equation_of_exchange basically the nominal money supply is only one part of the equation that which effects prices, if the "velocity of money" (i.e how often people spend money) is low, then prices don't go up or even go down if V drops. Think about it like this, if someone locks up a large percentage of money in the system in bank vaults and never touch them, then it has no effect in increasing prices. In recessions, that's exactly what people do: because people want to save to cushion against further "bad things" when GDP is dropping. So they lock their money up in bank vaults. Typo fucked around with this message at 18:18 on Mar 8, 2019 |
|
#
¿
Mar 8, 2019 18:04
|
|
|
Owlofcreamcheese posted:MMT still seems like lame libertarian garbage where we pretend we don't need to tax the rich and instead can just get everything for free with no tax is theft. (but actually just paying for things by taxing mostly non rich people with inflation instead in a way that hides who's paying) This is actually true in the sense the first time i came across 0% tax lets just print money for everything was on some crazy libertarian website 10 yrs ago or something
|
|
#
¿
Mar 22, 2019 03:24
|
|
|
Infinite Karma posted:Like Helsing just said, inflation is what happens if you spend but don't tax. Im pretty sure this is not the idea of MMT
|
|
#
¿
Mar 22, 2019 03:29
|
|
|
Thank you comrade development of socialistic monetary policy continues onwards
|
|
#
¿
Mar 22, 2019 17:00
|
|
|
|
| # ¿ May 15, 2024 17:40 |
|
|
perhaps it is left libertarianism
|
|
#
¿
Mar 22, 2019 18:34
|
|