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I agree that worries of inflation are unwarranted (if anything we are at risk of deflation), but what happens after the economy returns? Aren't we at risk of in
by xur17 7y ago
I agree that worries of inflation are unwarranted (if anything we are at risk of deflation), but what happens after the economy returns? Aren't we at risk of inflation from all of the new money dumped into the economy?
- cultus 7y agoWe'll have to wait and see. If it winds up being too much government spending to avoid inflation, then taxes would have to be raised to cut down the inflation. I don't think this would be such a bad thing, since the income redistribution would be a benefit anyway. My guess is that it wouldn't cause much inflation, since much of the demand destruction we've seen will be permanent.
- guerrilla 7y agoUS consumer debt is exceptionally high [1]. This was true long before the pandemic. There is plenty of demand for money on the books and the underclass has a long way to catch up even after that. 1. https://www.thebalance.com/consumer-debt-statistics-causes-and-impact-3305704 https://www.thebalance.com/consumer-debt-statistics-causes-a...
- LaEc 7y agoIf inflationary pressures get to high, the Fed will raise the Fed Funds rate, affecting the market interest rates, incentivizing saving, decreasing inflationary pressures.