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> Unlike the stimulus, much of which went to businesses and governments. However, business and governments didn't drive up the price of macaroni. However, the

> Unlike the stimulus, much of which went to businesses and governments. However, business and governments didn't drive up the price of macaroni. However, the $4500 the government gave my family probably did.

justinpowers 5y ago
Money circulates.
- legitster 5y ago
  Yes, but Econ 102 explains the importance of money supply on prices.
  - deleted 5y ago
    [deleted]
  - justinpowers 5y ago
    This is obviously about money supply. And UBI is not necessarily an increase in money supply (as it’s usually paid for by taxes and reduced welfare programs), whereas a government stimulus during an economic slowdown is, nearly by definition, an increase in money supply via government printing. (And the relationship between money supply and inflation would be covered in 101, not 102)
aaomidi 5y ago
Wait so let me read this properly: People bought food and therefore cost of food went up? So, following this logic, we have enough people who are regularly not getting enough food that when they can, it kills the economy? I...honestly if that's the actual reason this is happening then it seems like we should be looking at seeing how do we make it so everyone has food and produce food with that metric. Not with a lower metric and be fine with people hungry. Fascinating.
- legitster 5y ago
  No, that is not at all what I said. Giving everyone more money for the same supply of goods is the very basis of inflation. In Monopoly, if you give 1 player $500 they get a big advantage. If you give every player $500... nothing happens other than all auctions go up. > I...honestly if that's the actual reason this is happening then it seems like we should be looking at seeing how do we make it so everyone has food and produce food with that metric. Not with a lower metric and be fine with people hungry. This is exactly the point. If your goal is 0% inflation, the supply of money needs to be tied to actual economic growth. If the economy makes less stuff (like, during a pandemic) you actually need to find ways of taking money out to keep prices stable.

justinpowers 5y ago

Money circulates.

legitster 5y ago
Yes, but Econ 102 explains the importance of money supply on prices.
- deleted 5y ago
  [deleted]
- justinpowers 5y ago
  This is obviously about money supply. And UBI is not necessarily an increase in money supply (as it’s usually paid for by taxes and reduced welfare programs), whereas a government stimulus during an economic slowdown is, nearly by definition, an increase in money supply via government printing. (And the relationship between money supply and inflation would be covered in 101, not 102)

aaomidi 5y ago

Wait so let me read this properly: People bought food and therefore cost of food went up? So, following this logic, we have enough people who are regularly not getting enough food that when they can, it kills the economy? I...honestly if that's the actual reason this is happening then it seems like we should be looking at seeing how do we make it so everyone has food and produce food with that metric. Not with a lower metric and be fine with people hungry. Fascinating.

legitster 5y ago
No, that is not at all what I said. Giving everyone more money for the same supply of goods is the very basis of inflation. In Monopoly, if you give 1 player $500 they get a big advantage. If you give every player $500... nothing happens other than all auctions go up. > I...honestly if that's the actual reason this is happening then it seems like we should be looking at seeing how do we make it so everyone has food and produce food with that metric. Not with a lower metric and be fine with people hungry. This is exactly the point. If your goal is 0% inflation, the supply of money needs to be tied to actual economic growth. If the economy makes less stuff (like, during a pandemic) you actually need to find ways of taking money out to keep prices stable.