6 ms·

Inflation isn't directly (that is one-to-one) tied to the amount of money printed. That's a simplistic view of a complicated phenomena. What matters is demand a

Inflation isn't directly (that is one-to-one) tied to the amount of money printed. That's a simplistic view of a complicated phenomena. What matters is demand aggregated among many individuals. You can print any sum of money and if the person you give it to decides not to spend it, it doesn't affect demand and thus doesn't cause inflation. Meanwhile you can stop printing money, and if demand increases inflation can still occur.

RhysU 5y ago
But what if we handed the printed dollars to a large number of individuals to spend immediately to cover their income shortfalls in unprecedented government largess?
- notJim 5y ago
  If it's covering an income shortfall, it doesn't seem like that would cause inflation. If I normally spend $2k a month, but then lose my job and get $2k from the government, that's not going to cause inflation. From what I understand, much of the stimulus money was saved. https://fred.stlouisfed.org/series/PSAVERT https://fred.stlouisfed.org/series/PSAVERT
  - willcipriano 5y ago
    > If I normally spend $2k a month, but then lose my job and get $2k from the government, that's not going to cause inflation. That $2k a month that you used to earn is still out there somewhere unaccounted for.
  - nly 5y ago
    Except the money you would have been paid previously still exists somewhere and will go somewhere else.
- gizmo385 5y ago
  Then those people largely spend it on essentials, don't lose their housing, and don't starve to death.
  - RhysU 5y ago
    My point was about the money supply not ethics or morality.
kamaal 5y ago
>>You can print any sum of money and if the person you give it to decides not to spend it, it doesn't affect demand and thus doesn't cause inflation. In short this is the equivalent of not printing money. The very reason why you print money is to spend it. If you didn't want to spend money. Why print it?

RhysU 5y ago

But what if we handed the printed dollars to a large number of individuals to spend immediately to cover their income shortfalls in unprecedented government largess?

notJim 5y ago
If it's covering an income shortfall, it doesn't seem like that would cause inflation. If I normally spend $2k a month, but then lose my job and get $2k from the government, that's not going to cause inflation. From what I understand, much of the stimulus money was saved. https://fred.stlouisfed.org/series/PSAVERT https://fred.stlouisfed.org/series/PSAVERT
- willcipriano 5y ago
  > If I normally spend $2k a month, but then lose my job and get $2k from the government, that's not going to cause inflation. That $2k a month that you used to earn is still out there somewhere unaccounted for.
- nly 5y ago
  Except the money you would have been paid previously still exists somewhere and will go somewhere else.
gizmo385 5y ago
Then those people largely spend it on essentials, don't lose their housing, and don't starve to death.
- RhysU 5y ago
  My point was about the money supply not ethics or morality.

kamaal 5y ago

>>You can print any sum of money and if the person you give it to decides not to spend it, it doesn't affect demand and thus doesn't cause inflation. In short this is the equivalent of not printing money. The very reason why you print money is to spend it. If you didn't want to spend money. Why print it?