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Lyn Alden is a better economist than most, and this article helps explain in a simple way what causes inflation. We have inflation because of massive governmen

Lyn Alden is a better economist than most, and this article helps explain in a simple way what causes inflation. We have inflation because of massive government "stimulus" handouts over the last two years of the pandemic. The response to this pandemic was way overblown and has ended up destroying our economy and did no save many lives. Everyone loves getting government checks, but if all that new printed cash has to chase a smaller supply of goods and services (as a result of shutdowns), then massive inflation hits.

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js8 5y ago
> Everyone loves getting government checks, but if all that new printed cash has to chase a smaller supply of goods and services (as a result of shutdowns), then massive inflation hits. I am not really sure what do you suggest as an alternative solution to the sudden demand decrease, that some people simply die of hunger being unemployed? Inflation is IMHO less harmful than real wage decrease or unemployment.
- diordiderot 5y ago
  >that some people simply die of hunger being unemployed thats exactly what they want
- silexia 5y ago
  Real wages are going down. Nominal wages are going up significantly, but prices for goods and services are going up far faster. Keep in mind government corruption meant the rich got far more handouts than the poor, and that many billions were stolen by scammers. Government enforced shutdowns and regulations caused this, people should have been allowed to exercise their personal freedoms to stay home if they were at risk rather than required to at gunpoint. BTW, I am not an anti-masker / anti-vaxxer. I have the vaccine and booster and wear a mask. I just think the government reaction has been worse than the pandemic itself.
- josephcsible 5y ago
  Not GP, but how about the alternative that the people not become unemployed at all, because the government doesn't force their employer to shut down?
  - kesor 5y ago
    Nah, that wont work. How about we give everyone money and then those that are still employed are earning way way less than they used to in terms of purchasing power. That would be a much better equalizer for the middle class towards the bottom.
- b9a2cab5 5y ago
  > Inflation is IMHO less harmful than real wage decrease or unemployment For minimum wage workers and in general unskilled labor, this is just not true. Minimum wage workers can't afford to hedge against inflation by buying assets, and their income is artificially kept high by a price floor (minimum wage + legally mandatory benefits). When you inflate the USD their real income will drop to its true market value since the price floor doesn't move with inflation. Low paid workers also don't benefit from their debt reducing in real value because their nominal wage won't increase as fast as inflation due to the price floor I just talked about. Government checks made sense in the beginning of the pandemic but the 2nd round of stimulus passed later on by reconciliation did not. At that point there was a vaccine and a strong economic rebound. You need only look at the popularity of Dogecoin, WSB, etc. to see that people did not actually need that extra round of stimulus.
- roenxi 5y ago
  1. I echo josephcsible, shutting down employers is a mistake and likely to cause starvation. If people are banned from improving their own lives, there is a chance that their lives will get worse. 2. Just because there is an emergency doesn't mean everyone needs to sit around twiddling their thumbs. There was more work that needed doing in the pandemic, not less. That could have been parleyed into a job, leading to money for food.
mym1990 5y ago
Inflation can be found as a result of several possible root causes, and stimulus is probably certainly one of them. But you also have a shortage of goods due to extended supply chain issues. You have a reshuffling of the housing market as people go remote and move to different places(people leaving SF to go to Nashville, etc...). You have low interest rates that allow for incredibly cheap borrowing. There is no way to pin everything inflation to just printing.

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js8 5y ago

> Everyone loves getting government checks, but if all that new printed cash has to chase a smaller supply of goods and services (as a result of shutdowns), then massive inflation hits. I am not really sure what do you suggest as an alternative solution to the sudden demand decrease, that some people simply die of hunger being unemployed? Inflation is IMHO less harmful than real wage decrease or unemployment.

diordiderot 5y ago
>that some people simply die of hunger being unemployed thats exactly what they want
silexia 5y ago
Real wages are going down. Nominal wages are going up significantly, but prices for goods and services are going up far faster. Keep in mind government corruption meant the rich got far more handouts than the poor, and that many billions were stolen by scammers. Government enforced shutdowns and regulations caused this, people should have been allowed to exercise their personal freedoms to stay home if they were at risk rather than required to at gunpoint. BTW, I am not an anti-masker / anti-vaxxer. I have the vaccine and booster and wear a mask. I just think the government reaction has been worse than the pandemic itself.
josephcsible 5y ago
Not GP, but how about the alternative that the people not become unemployed at all, because the government doesn't force their employer to shut down?
- kesor 5y ago
  Nah, that wont work. How about we give everyone money and then those that are still employed are earning way way less than they used to in terms of purchasing power. That would be a much better equalizer for the middle class towards the bottom.
b9a2cab5 5y ago
> Inflation is IMHO less harmful than real wage decrease or unemployment For minimum wage workers and in general unskilled labor, this is just not true. Minimum wage workers can't afford to hedge against inflation by buying assets, and their income is artificially kept high by a price floor (minimum wage + legally mandatory benefits). When you inflate the USD their real income will drop to its true market value since the price floor doesn't move with inflation. Low paid workers also don't benefit from their debt reducing in real value because their nominal wage won't increase as fast as inflation due to the price floor I just talked about. Government checks made sense in the beginning of the pandemic but the 2nd round of stimulus passed later on by reconciliation did not. At that point there was a vaccine and a strong economic rebound. You need only look at the popularity of Dogecoin, WSB, etc. to see that people did not actually need that extra round of stimulus.
roenxi 5y ago
1. I echo josephcsible, shutting down employers is a mistake and likely to cause starvation. If people are banned from improving their own lives, there is a chance that their lives will get worse. 2. Just because there is an emergency doesn't mean everyone needs to sit around twiddling their thumbs. There was more work that needed doing in the pandemic, not less. That could have been parleyed into a job, leading to money for food.

mym1990 5y ago

Inflation can be found as a result of several possible root causes, and stimulus is probably certainly one of them. But you also have a shortage of goods due to extended supply chain issues. You have a reshuffling of the housing market as people go remote and move to different places(people leaving SF to go to Nashville, etc...). You have low interest rates that allow for incredibly cheap borrowing. There is no way to pin everything inflation to just printing.