3 ms·
Do you mean fiscal policy? You absolutely can infuse trillions of dollars into the economy without causing inflation after the economy takes a $4T hit from a pa
by blake1 5y ago
Do you mean fiscal policy? You absolutely can infuse trillions of dollars into the economy without causing inflation after the economy takes a $4T hit from a pandemic; the government spending will be what prevents disastrous deflation.
People worry about inflation, but forget how awful deflation is.
(And on a side-rant, it’s really bizarre how the hyperinflation of Weimar Germany is cited as enabling the rise of the Nazi party. The timing doesn’t work. They came to power during the depression-era deflation.)
- hcurtiss 5y agoI've never understood how deflation could ever be a concern in countries that print their own money. Can you not just print your way out of it every time?
- lotsofpulp 5y agoNot if you need to import anything, since you can inflate your currency all you want, but the world will deflate it relative to other currencies.
- whimsicalism 5y agoPolitical constraints around central bank policy. Or really strong deflationary market expectations, for whatever reason.
- blake1 5y agoI know of two examples from the Depression. In Germany, it was a deliberate policy. In France, it was a zealous adherence to the gold standard. I am also bewildered. So many bad effects of deflation.
- throw123123123 5y agoThe problem is that you can get both at the same time: deflation of asset prices and inflation of goods prices.
- imtringued 5y agoPoliticians don't give a damn about deflation. They will tell you how governments must be responsible with their budgets and do debt ceilings and austerity, while simultaneously promising income tax cuts for the rich which they finance by cutting public investment. It'll trickle down.