4 ms·

Hopefully, the necessity to deal with climate change will cause the government to run out of money for the ludicrous subsidies of corn for ethanol, cheap HFCS,

Hopefully, the necessity to deal with climate change will cause the government to run out of money for the ludicrous subsidies of corn for ethanol, cheap HFCS, large agribusiness, etc. It might also cause the U.S. government to be forced to start to acknowledge and deal with climate change.

sneak 7y ago
The government can’t run out of money unless you do.
- OmarIsmail 7y ago
  A government that prints and thus creates its own money can't run out of money.
  - hylaride 7y ago
    A government that prints too much money eventually makes it worthless and then "runs out" of it, though. See also: Venezuela, Zimbabwe, Weimar Germany.
    - bilbo0s 7y ago
      In fairness, none of them printed their own money really. They all relied on something else, and then printed promissory notes for that "something else". So the more promissory notes they printed, the less "something else" each promissory note was worth. One of the most confusing things to me in some of my econ classes was the realization that there is no "something else" backing my nation's currency. The US Dollar. As I understood it, it's just backed by the word of the US? (Could be wrong, it's been a while.) So I always wondered, what keeps them in check? I've never really figured that out. Someday maybe I'll go back and sit in on some more advanced classes?
      - effie 7y ago
        It certainly isn't merely the word of the US, it is its status and behaviour. The big factor is that US is a very big and stable economy and military wise. People know that, so they think large and long-term fall of dollar value is quite unlikely to happen.
    - pjc50 7y ago
      Both of these are right, rather than contradictory: a government can always keep printing its own currency. What it can't print is foreign currency. So hyperinflation shows up as a forex and balance of trade phenomenon first. As was the case in all three of those examples: Zimbabwe's land reform destroyed the productive export-led farming industry, so the cost of required imports such as oil drove the Zim dollar into the ground. Similarly Venezuala trashed its oil export industry and failed to develop others. Weimar Germany was required to pay reparations in gold to France. The postwar destroyed industry wasn't able to export enough goods to pay for the gold, so yet again other imports became prohibitively expensive. The US is very, very unlikely to experience these kind of problems; it is large enough to not be so dependent on imports, and in recent years not even on oil. The last inflation spikes were due to OPEC: yet again import-led inflation.
      - hylaride 7y ago
        I disagree. You don't get 79,600,000,000% (in Zimbabwe's case) inflation long after your farms had been idled. The price of goods in foreign "hard" currency actually remained relatively stable after some initial shocks, but the actual inflation was in Zimbabwe dollars after the gov't printed more Z$, which the majority of people there got paid in. If you study monetary history in the US, you'll find that the OPEC angle of the 1970s inflation was a scapegoat, and the real causes were politicians (in that case Nixon) refusing to raise interest rates (which indirectly slows monetary growth) because it would cool the economy and affect his popularity. It's a prime reason why the Fed (and most central banks in the world) now have "independence" to set rates. If the high cost of oil was all it took, we'd have had higher inflation during the oil spike a decade ago. Heck Germany, which has to import 100% of it's oil, saw it's inflation levels DROP in the 1970s as they raised rates to tame inflationary pressures.
        effie 7y ago
        That is interesting. Can you recommend some good sources on these economy laws? How can I convince somebody that increasing interest rates, an unpopular move, should prevent large inflation, which is something people want?
    - sneak 7y ago
      Which was exactly my point: the government that debases currency runs out of money only after the population does.

sneak 7y ago

The government can’t run out of money unless you do.

OmarIsmail 7y ago
A government that prints and thus creates its own money can't run out of money.
- hylaride 7y ago
  A government that prints too much money eventually makes it worthless and then "runs out" of it, though. See also: Venezuela, Zimbabwe, Weimar Germany.
  - bilbo0s 7y ago
    In fairness, none of them printed their own money really. They all relied on something else, and then printed promissory notes for that "something else". So the more promissory notes they printed, the less "something else" each promissory note was worth. One of the most confusing things to me in some of my econ classes was the realization that there is no "something else" backing my nation's currency. The US Dollar. As I understood it, it's just backed by the word of the US? (Could be wrong, it's been a while.) So I always wondered, what keeps them in check? I've never really figured that out. Someday maybe I'll go back and sit in on some more advanced classes?
    - effie 7y ago
      It certainly isn't merely the word of the US, it is its status and behaviour. The big factor is that US is a very big and stable economy and military wise. People know that, so they think large and long-term fall of dollar value is quite unlikely to happen.
  - pjc50 7y ago
    Both of these are right, rather than contradictory: a government can always keep printing its own currency. What it can't print is foreign currency. So hyperinflation shows up as a forex and balance of trade phenomenon first. As was the case in all three of those examples: Zimbabwe's land reform destroyed the productive export-led farming industry, so the cost of required imports such as oil drove the Zim dollar into the ground. Similarly Venezuala trashed its oil export industry and failed to develop others. Weimar Germany was required to pay reparations in gold to France. The postwar destroyed industry wasn't able to export enough goods to pay for the gold, so yet again other imports became prohibitively expensive. The US is very, very unlikely to experience these kind of problems; it is large enough to not be so dependent on imports, and in recent years not even on oil. The last inflation spikes were due to OPEC: yet again import-led inflation.
    - hylaride 7y ago
      I disagree. You don't get 79,600,000,000% (in Zimbabwe's case) inflation long after your farms had been idled. The price of goods in foreign "hard" currency actually remained relatively stable after some initial shocks, but the actual inflation was in Zimbabwe dollars after the gov't printed more Z$, which the majority of people there got paid in. If you study monetary history in the US, you'll find that the OPEC angle of the 1970s inflation was a scapegoat, and the real causes were politicians (in that case Nixon) refusing to raise interest rates (which indirectly slows monetary growth) because it would cool the economy and affect his popularity. It's a prime reason why the Fed (and most central banks in the world) now have "independence" to set rates. If the high cost of oil was all it took, we'd have had higher inflation during the oil spike a decade ago. Heck Germany, which has to import 100% of it's oil, saw it's inflation levels DROP in the 1970s as they raised rates to tame inflationary pressures.
      - effie 7y ago
        That is interesting. Can you recommend some good sources on these economy laws? How can I convince somebody that increasing interest rates, an unpopular move, should prevent large inflation, which is something people want?
  - sneak 7y ago
    Which was exactly my point: the government that debases currency runs out of money only after the population does.