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2008 is a great example of why fiat currency is helpful. The government can simply create more to stimulate cash flow and/or prevent a crisis of confidence in
by xapata 6y ago
2008 is a great example of why fiat currency is helpful. The government can simply create more to stimulate cash flow and/or prevent a crisis of confidence in a non-government institution.
- dleslie 6y agoTwelve years later and I'm still waiting on that severe/total economic collapse wrought of quantitative easing that the libertarian hawks envisaged.
- sparkie 6y agoBut when the government 'simply create more', they are not creating any more wealth. They are creating more units of currency to represent the same wealth as before, which eventually makes every unit of currency worth slightly less. The people who have assets in cash end up paying for it. That includes the poor who have most of their net worth in cash as they live paycheck to paycheck, and whose purchasing power has been stagnant for decades.
- xapata 6y agoIf the government "prints" money and immediately distributes it uniformly to the population, it benefits the poor most of all. Especially debtors. This year was a great example. Mortgage refinancing bonanza. If inflation really takes hold, those debtors will be very happy. > And that’s not a “rich get richer” kind of thing — the poverty rate fell. And it’s no surprise. Peter Ganong, Pacal Noel, and Joseph Vavra found that under the CARES superdole, “two-thirds of UI eligible workers can receive benefits which exceed lost earnings and one-fifth can receive benefits at least double lost earnings.” https://www.slowboring.com/p/the-cares-superdole-was-a-huge-success https://www.slowboring.com/p/the-cares-superdole-was-a-huge-...