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Many other economists agree. Those that disagree should explain the last 30 years of Japan to all of us. If after a pandemic, an energetic crisis, a global pol

Many other economists agree. Those that disagree should explain the last 30 years of Japan to all of us. If after a pandemic, an energetic crisis, a global politic crisis and a war in Europe, the explanation for inflation is "public debt", maybe there is some bias there to be examined.

weatherlite 4y ago
You're actually right high public debt could also lead to disinflation as the economy crumbles. Which economists say high public debt doesn't matter? Its mostly politicians. I've never heard a serious economist says it doesn't matter. There is consensus that above 100% debt to GDP is no good. If public debt doesn't matter btw, why does private debt matter? Simply publicly print away all private debt and viola problem solved. In fact why can't we all be billionaires?
- RobertoG 4y ago
  All debt is somebody asset. Public debt is a private asset. https://realprogressives.org/back-to-mmt-basics/ https://realprogressives.org/back-to-mmt-basics/
  - weatherlite 4y ago
    Yep looks like a serious economist alright...
origin_path 4y ago
The explanation for inflation is always money printing (mostly via issuance of state bonds), because that's literally the only way to get a general rise in prices, which is what inflation is meant to mean. In practice, measuring literally all prices is very hard, so governments measure a small subset and then call a change in that basket "inflation". The baskets were perhaps once a reasonable proxy but now it leads to problems, because it causes people to lose sight of what inflation really is. Higher gas prices is not inflation, it's just higher gas prices. Higher everything prices is inflation, but unless the money supply increases it's impossible for all prices to rise. With a stable monetary base a price rise in some essentials will cause other products to lower prices to try and juice demand that's falling away, or they will disappear entirely as society gets poorer (i.e. price = infinity) but companies going bankrupt because they can no longer sell their products doesn't affect statistical measures of prices. So these are very imperfect proxies. Suffice it to say that high public debt means economic activity is being distorted in favour of the state's priorities over those of the citizens. History provides many examples of where that leads when taken too far.
- mensetmanusman 4y ago
  Prices also rise when the supply goes down by 50% because entire cities shut down in China.
  - origin_path 4y ago
    Some prices rise, yes, but if the money supply doesn't increase then it's not possible for all prices to rise because there wouldn't be enough actual money to keep paying those prices. A limited quantity of money + some rising prices would force prioritization and marginal businesses with high prices are forced out of the market, as the increased prices would not be viable. At which point those prices stop being counted towards inflation, as they don't exist anymore.

weatherlite 4y ago

You're actually right high public debt could also lead to disinflation as the economy crumbles. Which economists say high public debt doesn't matter? Its mostly politicians. I've never heard a serious economist says it doesn't matter. There is consensus that above 100% debt to GDP is no good. If public debt doesn't matter btw, why does private debt matter? Simply publicly print away all private debt and viola problem solved. In fact why can't we all be billionaires?

RobertoG 4y ago
All debt is somebody asset. Public debt is a private asset. https://realprogressives.org/back-to-mmt-basics/ https://realprogressives.org/back-to-mmt-basics/
- weatherlite 4y ago
  Yep looks like a serious economist alright...

origin_path 4y ago

The explanation for inflation is always money printing (mostly via issuance of state bonds), because that's literally the only way to get a general rise in prices, which is what inflation is meant to mean. In practice, measuring literally all prices is very hard, so governments measure a small subset and then call a change in that basket "inflation". The baskets were perhaps once a reasonable proxy but now it leads to problems, because it causes people to lose sight of what inflation really is. Higher gas prices is not inflation, it's just higher gas prices. Higher everything prices is inflation, but unless the money supply increases it's impossible for all prices to rise. With a stable monetary base a price rise in some essentials will cause other products to lower prices to try and juice demand that's falling away, or they will disappear entirely as society gets poorer (i.e. price = infinity) but companies going bankrupt because they can no longer sell their products doesn't affect statistical measures of prices. So these are very imperfect proxies. Suffice it to say that high public debt means economic activity is being distorted in favour of the state's priorities over those of the citizens. History provides many examples of where that leads when taken too far.

mensetmanusman 4y ago
Prices also rise when the supply goes down by 50% because entire cities shut down in China.
- origin_path 4y ago
  Some prices rise, yes, but if the money supply doesn't increase then it's not possible for all prices to rise because there wouldn't be enough actual money to keep paying those prices. A limited quantity of money + some rising prices would force prioritization and marginal businesses with high prices are forced out of the market, as the increased prices would not be viable. At which point those prices stop being counted towards inflation, as they don't exist anymore.