Earlier quoted context omitted.
Given that California can't print money, why do you think those checks are "printing money"? And no, it's not a "sneaky backdoor". It's the government doing what it should do, tighten financial inequality gaps. And preventing unnecessary suffering. We're still a society, we occasionally take care of the weaker people amongst us. (Frankly, not often enough) And "without real oversight" is... you're aware this is going…
They may not be printing money, but they are propping up inflation by giving people free money for compensating for inflation.
Inflation is at a 40 year high. What can history teach us?
341–350 of 550 posts
Re: Inflation is at a 40 year high. What can history teach us?
#342Earlier quoted context omitted.
But in the Californian case, it's not printing money. The state government doesn't have the ability to make US dollars. The state must balance its budget, and cannot rely on debt the way the federal government does. The inflation checks are only possible because of a giant, historic budget surplus from 2021. Had inflation not gotten this bad, the checks would have still gone out in some other form (earlier in 2022 we…
I never said that it was inflationary in the California case. I don't think it is. As to whether or not the state should send checks to everyone - I don't really know anything about it and so don't have a firm opinion. My intuition is that individuals will likely spend the money better than the state would have, so that's good, and it's probably an indication that taxes are too high if the state has a big surplus.
But Keynes advocated that governments should have surpluses in good times and spend more in bad ones. Normally because the state isn't able to carry a continuing large surplus, this isn't possible; it has to cut in lean years and give rebates otherwise. It's only in this short period of reversal in consecutive years that we can approach that policy. I'm guessing the same checks would have done more good if they could have waited until 2023 or later.
Re: Inflation is at a 40 year high. What can history teach us?
#343I wonder whatever could have caused this unprecedented inflation?
Re: Inflation is at a 40 year high. What can history teach us?
#344Earlier quoted context omitted.
1. There's no extra money - poorer people just consume less. 2. Because companies just take all of the difference as extra revenue, and prefer to increase salaries (if not just keep everything as profit) rather than reducing prices. Note that I'm not claiming that increased money supply doesn't cause inflation. It obviously does. I'm claiming it's not the only cause of inflation. It's sufficient, but not necessary fo…
It's not so simple though since there's indirect effects that immediately follow. 1. Everyone consume less. Even rich people have to buy less of something else to pay for the higher-priced gas. So demand goes down elsewhere driving down other prices. 2. If margins or salaries increase then it increases the incentive for competition to enter the market and compete on price.
2. It takes a very long time to create a new manufacturing business, and it's hard to know how gas prices will evolve in 2-5 years time (which is a decent conservative estimate on when you would be able to start selling your products if you start today).
Re: Inflation is at a 40 year high. What can history teach us?
#345Earlier quoted context omitted.
Distributing more money is almost certainly unproductive. During Covid large checks were mailed out. Reddit was full of 'casual investors' throwing money at meme stocks that explained it was 'covid money' and thus didn't matter much to them. Student loan debt forgiveness is the latest madness. The end result? Those with the least money (the poor, and those on fixed incomes) are totally hosed. If you can't afford rent…
> The end result? Those with the least money (the poor, and those on fixed incomes) are totally hosed. If you can't afford rent at $800, you surely can't afford it at $1400. More handouts only make the problem worse. That's absurd; while a one-off is nowhere near as good as a basic income, a flat "handout" benefits the poor for obvious reasons (at the expense of the rich; there's no free lunch). > The Fed's response…
Re: Inflation is at a 40 year high. What can history teach us?
#346Re: Inflation is at a 40 year high. What can history teach us?
#347Earlier quoted context omitted.
> why don't they do that anyway? Ever heard of a company called Apple? They raise prices all the time because they can. Same with AT&T, or banks ATM Fees, or gas prices. Right now gas prices are at an all time high, and so are gas profits. > The answer is Supply & Demand, it's the Law, and is in every econ textbook. Also, that's Econ 101. Which isn't quite reality, it's idealized for simplicity because it is an intro…
Which prices is Apple raising? Have you gone and reviewed how much Apple's products cost in the 80s and 90s? You might want to do that, quickly, before the laughter gets so loud that you are deafened.
However, the cheapest iphone 14 is 799..
You may be right about laptops/desktops though.
Re: Inflation is at a 40 year high. What can history teach us?
#348Earlier quoted context omitted.
> History teaches us that inflation will continue as long as the government keeps printing fiat money. Of course, that is almost a tautology. The devil is in the details. No inflation is bad because the economy stops. High inflation is bad because of erosion of purchasing power and negative impact on nearly every participant in the economy. So what do you do to get that sweet spot of about 1-2% inflation? I'd say rai…
> Of course, that is almost a tautology Inflation lags the money printing, so it isn't a tautology. > So what do you do to get that sweet spot of about 1-2% inflation? I'm amazed that propaganda of a sweet spot gets so heavily embedded into the popular wisdom. If there is a sweet spot for inflation, it's 0%. Note that the US had net 0% inflation from 1800-1914, while growing from subsistence farming to superpower.
0% inflation is generally not a safe target. In an economy you want to avoid deflation at all costs. If consumers expect future price drops, demand can dip significantly and induce further drops in price (deflationary spiral). Businesses need consistent, predictable demand, else they enact shortsighted, over-reactive responses (e.g. layoffs) which can further exacerbate an economic downturn. See the Japanese financial crisis. Even a small fluctuation into deflationary territory can have long-lasting effects on consumer perception. It's safer (read: insurance policy) to maintain a slightly positive inflation rate so that consumers are encouraged to make purchase decisions promptly when needs arise versus indefinite speculative postponement.
Of course, the "optimal" inflation rate is context-dependent. Your unique economic situation will dictate which inflation trade-offs you end up selecting.
Re: Inflation is at a 40 year high. What can history teach us?
#349Earlier quoted context omitted.
I realized that kerosene heater without exhaust that often used in cooler Japan area is really bad after I bought CO2 meter. CO2 easily go 10000ppm if ventilation is a bit poor (even poor insulation). Kerosene heater with exhaust pipe seems to fine, but now heat pump is generally better option. Still it seems to good backup for not to be death by freeze.
I wouldn't burn anything indoors without having at least two carbon monoxide detectors in the room. Seems super risky to me.
Re: Inflation is at a 40 year high. What can history teach us?
#350Earlier quoted context omitted.
> In California, people fitting certain economic criteria are now being issued $1000 checks for inflation relief. This is beyond ludicrous. Its not. Its happening in Europe too. Its a way to try to get people through the winter and avoid the energy crisis impacting ordinary people. That's what a government should do - take care of its people during extraordinary times.
That doesn't make sense though. You can't create energy by printing money. You just redistribute the value of your money. Maybe that's good - not clear to me why it's better to use inflation, which risks destabilizing the currency and punishes people who saved money, rather than straightforward taxes.
Capitalism's own solution so far was to create more available properties - more individual debt such as credit cards and mortgages, privatize public goods like health and education, more destruction of ecosystems, selling attention and disrupting work, and the latest fad, cryptocurrencies. But these are only temporary solutions, they do not address the core problem of increasing social inequality.
Likewise, printing money and giving them to the poor (while half of it goes directly to the top, because the decision-makers are only human) is a stopgap solution in the system where most money quickly end up accumulated at the top. It's a desperate attempt by governments to maintain social order.
In the middle of 20th century, the capitalism's tendency to create disparity was somewhat resolved in Keynesian approach, where state "investments" (based on taxation) were basically redistribution of the money back to the bottom, so that the process of accumulation could continue slower and indefinitely. That was eventually abandoned, for ideological reasons (people shouldn't get "free money", and the "private property" is sacrosanct).
However, it is the only known solution. The proper taxation of the rich (and property) is badly needed to long-term stabilize the capitalist system.
One could make an analogy with any other competition. When another competition starts, winners (of the old competition) are usually given the same place at the start as everybody else. This is because without this rule, the competition would quickly demotivate everybody. But this is happening under neoliberalism, and threatens to eventually halt the positives of the capitalist competition.