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>Moderate inflation is good for an economy based on credit, _especially_ so when so many individuals are overburdened by overwhelming student loan debt and unde

• nhaehnle 10y ago
  By their very nature, borrowers tend to spend money while lenders don't. The total sum of spending in the economy is equal to GDP, so if you care about increasing GDP, prioritizing borrowers makes sense. At least, that's the basic argument. In practice, what might happen is that the borrowers mostly borrow to make asset purchases in financial markets rather than in the real economy, which is a kind of spending that doesn't count towards GDP.
  • brutus1213 10y ago
    Savers build up capital stocks. When you consider domestic savers vs external ones, you start to see a weird problem: over time, you sell out all your assets. We're sort of seeing this in real-estate in major cities.