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If we assume that corporate value is relatively unchanged from 2014 and then assume that the government bails out the companies by paying off the debt, then the
by pfraze 7y ago
If we assume that corporate value is relatively unchanged from 2014 and then assume that the government bails out the companies by paying off the debt, then the stock market's growth from 2014 would be a form of inflation, wouldn't it?
- alexpetralia 7y agoYes, asset inflation. Which we've seen (in corporate & startup valuations). We have not seen similar inflation of goods in the wider economy (except real estate, health care and higher education).
- jrs235 7y ago>(except real estate, health care and higher education). All also being assets. (Health care equating to health). Who has benefited the most from asset inflation? Those well off or the lower working class?
- jazzyk 7y agoReal-estate is assets, of course. But I think the inflation in health-care/education is caused by lack of competition. As in - you can choose to not buy a new coat this winter, but you HAVE to buy health insurance. You HAVE to buy college education for your kid or otherwise s/he won't be able to ever start a family (working as a barista, or some such). Also, none of these services were outsourced to cheaper location (because they can't. although a good number of people have been going abroad to get their medical degree, etc.)
- georgeecollins 7y agoNot only inflation. Certainly earnings increased in many cases due to tax cuts and tax forgiveness, such as allowing US tech companies to repatriate money at reduced tax rates. If you assume the tax cuts will continue, the stocks are more valuable.