2 ms·

Where is that 5% coming from? They don't have the money. They don't even have the money to pay the expenses they're committed to. Inflation is a tax on peopl

by gozur88 10y ago

Where is that 5% coming from? They don't have the money. They don't even have the money to pay the expenses they're committed to. Inflation is a tax on people who hold your currency. That's where the money to fund government programs is coming from.

Dylan16807 10y ago
> Where is that 5% coming from? As you said: "The government is printing money to pay expenses". I'm talking about a limit on how much money they print. > Inflation is a tax on people who hold your currency. It is. And it goes from bad to disaster when it goes from inflation to hyperinflation.
- gozur88 10y ago
  They can't limit the amount they print because otherwise they won't have enough to pay the bills.
  - Dylan16807 10y ago
    The bills are increasing exponentially faster than 5% a month? I want to make it clear that I'm suggesting that they start by printing more than they spent the previous month.
    - gozur88 10y ago
      >The bills are increasing exponentially faster than 5% a month? In absolute units of currency? Yes. When you print money like that every unit of currency is worth correspondingly less. It's exponential, which is how you get 480% inflation this year and a projected 1640% next year in Venezuela without a constant dollar increase in spending. The only way out is a drastic reduction in services.
      - Dylan16807 10y ago
        That projected amount is assuming they don't restrict how much they print, right? I don't see how all of the following could be true at the same time: 1. The inflation is caused by the printing of more money. 2. Printing enough money to inflate the supply less than 5% per month. 3. Costs increasing more than 5% per month.
        gozur88 10y ago
        The problem is the government isn't putting that money to productive use in an economic sense, and is taking a larger and larger slice of the people's economic output because that output is shrinking. If the government and the economy were both functioning properly there would be no reason to print money - the treasury would be receiving enough money through taxation. Governments don't go into wholesale printing unless that's not happening. Though to be fair it seems every FR system does at least print around the edges, eventually.

by gozur88 10y ago

Dylan16807 10y ago

> Where is that 5% coming from? As you said: "The government is printing money to pay expenses". I'm talking about a limit on how much money they print. > Inflation is a tax on people who hold your currency. It is. And it goes from bad to disaster when it goes from inflation to hyperinflation.

gozur88 10y ago
They can't limit the amount they print because otherwise they won't have enough to pay the bills.
- Dylan16807 10y ago
  The bills are increasing exponentially faster than 5% a month? I want to make it clear that I'm suggesting that they start by printing more than they spent the previous month.
  - gozur88 10y ago
    >The bills are increasing exponentially faster than 5% a month? In absolute units of currency? Yes. When you print money like that every unit of currency is worth correspondingly less. It's exponential, which is how you get 480% inflation this year and a projected 1640% next year in Venezuela without a constant dollar increase in spending. The only way out is a drastic reduction in services.
    - Dylan16807 10y ago
      That projected amount is assuming they don't restrict how much they print, right? I don't see how all of the following could be true at the same time: 1. The inflation is caused by the printing of more money. 2. Printing enough money to inflate the supply less than 5% per month. 3. Costs increasing more than 5% per month.
      - gozur88 10y ago
        The problem is the government isn't putting that money to productive use in an economic sense, and is taking a larger and larger slice of the people's economic output because that output is shrinking. If the government and the economy were both functioning properly there would be no reason to print money - the treasury would be receiving enough money through taxation. Governments don't go into wholesale printing unless that's not happening. Though to be fair it seems every FR system does at least print around the edges, eventually.