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Do you mind explaining "We can print tens of trillions and still not see inflation, if we control the costs of healthcare and education."?

toomuchtodo 7y ago
Happy to. If you have inelastic demand for something, the cost will rise to consume all available dollars. Educational costs rise faster than inflation because the federal government hands out loans that you can’t default on. Healthcare costs rise because you have no alternative to health insurance premiums, copays, and deductibles except going without (to great peril). You need a degree to check a box for employment, you need healthcare to not die. The money your central bank prints is then consumed inefficiently. Looking at other goods and services, there’s only so much food, energy, clothing, and so on you can consume. Additional dollars beyond a certain point provide diminishing marginal utility. Bill Gates doesn’t order tractor trailers worth of food; he requires roughly the same amount of calories as you do. So! Due to the transition to a services based economy, the US economy slowly but surely moving away from oil needed for growth (over the last 15 years), global demand for dollars, and structural demographic changes (an older population consumes less of everything except healthcare), we can print fiat without issue with some cost controls around inelastic needs.
- redis_mlc 7y ago
  > Do you mind explaining "We can print tens of trillions and still not see inflation, if we control the costs of healthcare and education."? At a high level, there are only a few productive economies in the world: USA, Germany, and to a lesser extent Japan and S. Korea. The rest of the world consists of countries that are either small, subsistence farmers or welfare states. So the USA can basically do whatever it wants monetarily. It also helps that it's the only global currency. You can go to the farthest ends of the earth, and people hoard US dollars there.

toomuchtodo 7y ago

Happy to. If you have inelastic demand for something, the cost will rise to consume all available dollars. Educational costs rise faster than inflation because the federal government hands out loans that you can’t default on. Healthcare costs rise because you have no alternative to health insurance premiums, copays, and deductibles except going without (to great peril). You need a degree to check a box for employment, you need healthcare to not die. The money your central bank prints is then consumed inefficiently. Looking at other goods and services, there’s only so much food, energy, clothing, and so on you can consume. Additional dollars beyond a certain point provide diminishing marginal utility. Bill Gates doesn’t order tractor trailers worth of food; he requires roughly the same amount of calories as you do. So! Due to the transition to a services based economy, the US economy slowly but surely moving away from oil needed for growth (over the last 15 years), global demand for dollars, and structural demographic changes (an older population consumes less of everything except healthcare), we can print fiat without issue with some cost controls around inelastic needs.

redis_mlc 7y ago
> Do you mind explaining "We can print tens of trillions and still not see inflation, if we control the costs of healthcare and education."? At a high level, there are only a few productive economies in the world: USA, Germany, and to a lesser extent Japan and S. Korea. The rest of the world consists of countries that are either small, subsistence farmers or welfare states. So the USA can basically do whatever it wants monetarily. It also helps that it's the only global currency. You can go to the farthest ends of the earth, and people hoard US dollars there.