Commonwealth.
In the nicest possible way. You need to read some more first. You are missing a whole bunch of background.
A few things to read up on. Look for like entry level explainers, college course materials, etc.
“Economics What causes inflation.” You should be looking for articles that talk about money supply.
“Inflation and unemployment. Economics”
“Cash transfer economics”
Regarding what is different between now and quantitative easing. We need to remember that almost every government on the planet has taken the same strategy.
“Oh. Covid is shrinking our economy but we dont want to be worse off so we will print money”
Now every country is simultaneously coming out of the covid recessions at full speed, with a fuck ton of extra money AND you have separate issues causing independent spikes in both energy and food prices globally
It’s a perfect fuckig storm.
I’m going back to the original comment here, because this conversation has gotten super confusing to me.
I feel like you’re blending two things together:
The reason I think this is confusing is because there are two possible solutions to the problem you have in mind:
I think it’s ok to prefer one or the other of these, but I think requiring both is silly. If you give poor people money, you don’t need to then put restrictions on that money because they’re already going to use it on necessities for the most part. That’s where there immediate financial needs are.
I think the evidence shows that low-income people generally use windfalls/stimulus money on necessities:
or on paying down debt (particularly with follow up stimulus payments):
But maybe I’m not actually understanding the argument? I just don’t see evidence for the concern that like poor people are using stimulus money to buy caviar and playstations.
Or. Just give poor people unrestricted money but do it through redistribution not printing cash.
Money is fungible so they’ll just spend their previous rent/gas/food money on other stuff now that they have an extra 1k to allocate. If they’re inclined to be frivolous the way you think, they’ll be exactly as frivolous in your solution.
I don’t really understand the distinction you’re making. How the government funds payments to the poor once you decide what those payments should look like? Doesn’t seem relevant to the conversation, but again I feel like I’m not really understanding CW’s argument.
This is kind of like arguing what colour your lambo should be. You ain’t getting one so don’t worry about it. The current purpose of the government of the United States is to keep poor people poor so that they are gently forced into app and subscription/rent based servitude by the lol hand of the market.
Inflation is the relationship between production and the money supply.
Giving poor people money impacts both.
How quickly they spend or circulate the money will determine the impact on the money supply.
What impact that spending has on production depends partly on the general state of the economy. Often it as a positive effect. I.e. you give money to a bunch of poor villagers in the developing world and that creates productive capacity. Investments in education, agriculture, transport. Give it to someone who is just going to chase the same scare goods, then less so.
If you create the money out of thin air, then almost by definition that’s going to have a greater increase on the money supply than if you are moving it around.
Sure, but you still got to be careful with what the decisions could potentially lead to when you say “we won’t let you work a job but we got your necessities covered”!
A lot of things happened during covid that affected the money supply like the majority of the richest most powerful companies actually profiting more + leading to more barriers to entry for competitors. But I would agree that there was some wasteful spending once lockdowns were lifted.
I think I’m going to bow out here because it’s clear I’m not understanding the argument. This was the original point:
This is confusing to me! Poor people getting money will lead to inflation in consumer goods, so we should restrict that spending to things like food and utilities because those… aren’t consumer goods?
I don’t think this argument has anything to do with the money supply or whether you raise taxes to fund that distribution to poor people. Or at least, I think it’s unnecessarily complicating an already-confusing point by layering that on.
This comes back to my point earlier. This discussion is lacking a lot of basic understanding of how inflation works.
You cant talk about inflation without discussing money supply.
You’re wrong about this. That’s not what’s causing inflation and it isn’t true besides. The academic literature says the opposite as does my entire lived experience with poverty, which is extensive.
this is why i don’t invest in musk’s companies, except through funds or whatevs. cw feels that when he buys a tesla stock, his interests align with elon, but i disagree.
“targeting” aid is a bit like “means testing”, no? but we already know that means testing helps those who know how to navigate the system, usually with lawyers who can help, and leaves those who actually need it in the dust.
I’m not saying giving poor people money caused the inflation crisis, I’m saying that it caused inflation in discretionary consumer goods like electronics back during 2020-21, which was a sign it didn’t work as intended.
I don’t think a survey like that is reliable.
More like TVs and PlayStations. I’m not criticizing their decisions either. I think the evidence was what happened in prices when this was going on, as well as anecdotally from a guy who runs an electronics store in my poker game.
Perhaps, although there are ways to address that too.
I guess I should have said discretionary consumer goods. And no it wouldn’t cause inflation in food and utilities because demand for milk and bread wouldn’t increase notably. I guess maybe demand for steak could go up, or something.
Wait, what? I don’t own TSLA anyway, but I’m not sure what point you’re referencing that I’ve made.
I didn’t say it caused the current inflationary environment, I said the opposite nearly from the start. People keep misunderstanding and/or twisting what I’m saying.
I’m basically saying TVs got more expensive when this money went around, at the same time that people who usually have ~no discretionary spending money had some. They flew off shelves anyway, despite the price hikes.
i actually found the post. i had like a two reply argument with you.
I believe my take was if I own a stock and it goes up that’s good for me regardless of why. Obviously if it’s a pump and dump I have to sell it to realize the benefits, but the opportunity to do so is a good thing.
yeah sure, but i’d rather not chase stocks based on a pump and dump billionaire. that’s just not good for my mental health