Live data from Hacker News

The Great Pause Was an Economic Revolution

foreignpolicy.com

21–30 of 125 posts

Re: The Great Pause Was an Economic Revolution

#21

It's hard to say that this Great Pause actually "worked", since the governments of the world had to dump trilions into stimulus to make businesses not simply die. We and our children and our childrens' children will be paying for this with our taxes for decades to come. If we have another Pause in the next few months, then it will be the body blow that completely cripples the economy, especially in the US. I can't se…

Why would we (assuming you mean the US) have to pay for this with our taxes, who do we owe the money to? The US issues it’s own currency and we printed money to keep the economy afloat. We don’t owe that debt to anyone? The only reason extra taxes would be needed is to curb inflation.

Inflation caused by currency debasement is a flat tax, which is comparatively regressive. It raises the prices of all items faster than wages, and everyone has to buy food, buy electricity, etc.

Someone will have to pay.

Re: The Great Pause Was an Economic Revolution

#22

Exactly correct. I would go a bit further even though: not only is it possible to deliberately engineer the way the economy functions to achieve specific goals, but this has already been done and the supposedly naturally self designed, self regulated free market economy is anything but. Rather it has been engineered to benefit someone, it’s just not you and me but a small percentage of excessively rich people.

You're kidding, right? This "engineering" of the economy has put tens of millions of people out of work and destroyed many small and medium businesses, and that was only after a couple of months! Imagine how bad things would be if we locked down for an entire year.

Re: The Great Pause Was an Economic Revolution

#23

It's hard to say that this Great Pause actually "worked", since the governments of the world had to dump trilions into stimulus to make businesses not simply die. We and our children and our childrens' children will be paying for this with our taxes for decades to come. If we have another Pause in the next few months, then it will be the body blow that completely cripples the economy, especially in the US. I can't se…

Why would we (assuming you mean the US) have to pay for this with our taxes, who do we owe the money to? The US issues it’s own currency and we printed money to keep the economy afloat. We don’t owe that debt to anyone? The only reason extra taxes would be needed is to curb inflation.

Maybe at the federal level, but state and local governments cannot print money. They will need to raise taxes to cover thier costs.

Re: The Great Pause Was an Economic Revolution

#24
post #11

Earlier quoted context omitted.

The question is, was this a free lunch then, or will it be paid for via inflation?

Inflation is too much demand chasing too little supply. If the money printing simply replaced missing demand, should we expect any inflation?

If demand stayed constant while supply decreased because fewer people were working, yes I would expect inflation.

Re: The Great Pause Was an Economic Revolution

#25
There's a lot I agree with about this article in terms of the analysis itself, but I'm amused at the idea that this level of control is a dream of the "the radical left and radical right." The economy / world order we have requires significant amounts of regulation and control. We fear, for instance, China's disrespect of intellectual property law precisely because respect for intellectual property isn't an emergent artifact of a free market; it requires a complex and well-funded legal system with an equally well-funded enforcement arm. An economy where copyright and patent and trademark and trade secret law are effective may be a "living organism," but it's a manicured lawn with a trimmed hedge, not an old-growth redwood forest. You can prefer its shape and appreciate its beauty, of course, but be sure to ascribe agency appropriately.

And that's the real thing the centrists don't want the radicals to realize - that the center is where it is because of careful pruning and grafting, that in so many things from immigration and work visas to tax policy to trust funds to zoning to policing to military spending to labor law to (as the article mentions) how we deal with the homeless and the destitute, we're not taking a natural or default position in any meaningful sense, we're taking the current position, and working hard to keep things that way. The radicals aren't wrong simply because they are radicals and they demand change, so don't argue simply that their position is infeasible, or you may find that it's not as infeasible as you thought. Argue, if it's true, that their position is morally in the wrong. (And "Your proposals will certainly lead to economic collapse and suffering" is really an argument about feasibility.)

Another world is possible. For those who benefit from the current one, that's a scary thought. It's a thought that's driven countless restorationist or reactionary movements through history, from the Confederates to the Bourbons to Tokugawa to the well-funded fall of communism - but they fight so hard because they know that the other world can actually survive.

Re: The Great Pause Was an Economic Revolution

#26

Earlier quoted context omitted.

Why would we (assuming you mean the US) have to pay for this with our taxes, who do we owe the money to? The US issues it’s own currency and we printed money to keep the economy afloat. We don’t owe that debt to anyone? The only reason extra taxes would be needed is to curb inflation.

Inflation caused by currency debasement is a flat tax, which is comparatively regressive. It raises the prices of all items faster than wages, and everyone has to buy food, buy electricity, etc. Someone will have to pay.

Inflation is not a given, though. Governments issuing stimulus payments != inflation, at least not necessarily.

Re: The Great Pause Was an Economic Revolution

#27

Earlier quoted context omitted.

Why would we (assuming you mean the US) have to pay for this with our taxes, who do we owe the money to? The US issues it’s own currency and we printed money to keep the economy afloat. We don’t owe that debt to anyone? The only reason extra taxes would be needed is to curb inflation.

Maybe at the federal level, but state and local governments cannot print money. They will need to raise taxes to cover thier costs.

Can't they just get an indefinite loan from the federal government, since the numbers are made up and don't matter anyway?

Re: The Great Pause Was an Economic Revolution

#28
> With the Spanish flu a century ago, people adapted their individual behavior, but social life proceeded more or less as before. “Public places of amusement” were shuttered, but work and business were little affected overall.

This is a pretty telling difference with how we perceive the world today. During the last decades most people living in the "first world" (however you define it today) lost ability to rationally think about small additional chances of dying. Even though the usual set of killers, from old age to cancer to traffic, are still around us and take a lot of lives every year (I believe CDC estimates 650000 US deaths from heart disease per year), they do not prevent us from living and enjoying our lives; we seem to mentally zero those deaths out. But a very small unusual danger can cause widespread panic.

As a non-coronavirus example, in 2002 a "DC sniper" killed 10 people in 3 weeks. When I was going to DC during that time for business folks from Chicago were calling me crazy, even though Chicago has way more people fatally shot during average 3 weeks. All my attempts to argue that additional risk is minuscule got nowhere.

We need to re-learn to make rational decisions about risks. Otherwise we will be constantly hiding under the table for any loud noise and destroy our economy, fun of life and long-term life satisfaction. My 2c.

Re: The Great Pause Was an Economic Revolution

#29

Earlier quoted context omitted.

Why would we (assuming you mean the US) have to pay for this with our taxes, who do we owe the money to? The US issues it’s own currency and we printed money to keep the economy afloat. We don’t owe that debt to anyone? The only reason extra taxes would be needed is to curb inflation.

Inflation caused by currency debasement is a flat tax, which is comparatively regressive. It raises the prices of all items faster than wages, and everyone has to buy food, buy electricity, etc. Someone will have to pay.

Hm no; monetary inflation is reducing the value of each dollar so disproportionately affects those with more dollars, making it progressive.

Re: The Great Pause Was an Economic Revolution

#30

Exactly correct. I would go a bit further even though: not only is it possible to deliberately engineer the way the economy functions to achieve specific goals, but this has already been done and the supposedly naturally self designed, self regulated free market economy is anything but. Rather it has been engineered to benefit someone, it’s just not you and me but a small percentage of excessively rich people.

You're kidding, right? This "engineering" of the economy has put tens of millions of people out of work and destroyed many small and medium businesses, and that was only after a couple of months! Imagine how bad things would be if we locked down for an entire year.

I think you're misreading the comment - the person you're responding to is claiming that the engineering of the economy started way more than a couple of months ago.
Post reply on HN