4 ms·

Give poor people more money > prices go up > poor people can't afford stuff > give poor people more money > prices go up > ...

mikepurvis 4y ago
In theory yes, and I think we probably see this effect with things like home-buyer credits, low interest rates, etc all contributing to pushing up the cost of houses. But has it been studied that this is actually how this plays out with a low-level consumer good like mustard?
WalterBright 4y ago
You've just described college tuition!
- lotsofpulp 4y ago
  No. College tuition is lend people unlimited amount of taxpayer’s money with no underwriting -> colleges increase prices as much as possible without getting too much political blowback in the immediate term. And then taxpayers eat the loss via loan forgiveness or decreased purchasing power of the USD as interest rates and repayment terms are continuously relaxed.
  - WalterBright 4y ago
    Sounds the same to me.
    - lotsofpulp 4y ago
      Would you rather be given money or lent money? It would be a pretty big difference to me. Lending money today instead of giving money lets leaders and voters today to punt sacrifices to tomorrow’s taxpayers, and of course inflates college tuition prices so the borrowers have reduced purchasing power, as well as future users of the currency. That is the whole reason lending for college tuition became a thing. Some genius figured out how to cut taxes today while still being able to say they are helping expand access to higher education to poor people and college students.
lotsofpulp 4y ago
You missed the step where you take money from richer people, and then give that money to poorer people. Across all goods/services, that means richer people would be able to consume less, and poorer people would be able to consume more. Whether or not people sacrifice eating Dijon mustard is up to them. The goal is not to guarantee Dijon mustard for everyone, the goal is to mitigate how poor poorer people are. The other way to bring down Dijon mustard prices is for the government to increase supply of Dijon mustard, or remove whatever is restricting supply of Dijon mustard.

mikepurvis 4y ago

In theory yes, and I think we probably see this effect with things like home-buyer credits, low interest rates, etc all contributing to pushing up the cost of houses. But has it been studied that this is actually how this plays out with a low-level consumer good like mustard?

WalterBright 4y ago

You've just described college tuition!

lotsofpulp 4y ago
No. College tuition is lend people unlimited amount of taxpayer’s money with no underwriting -> colleges increase prices as much as possible without getting too much political blowback in the immediate term. And then taxpayers eat the loss via loan forgiveness or decreased purchasing power of the USD as interest rates and repayment terms are continuously relaxed.
- WalterBright 4y ago
  Sounds the same to me.
  - lotsofpulp 4y ago
    Would you rather be given money or lent money? It would be a pretty big difference to me. Lending money today instead of giving money lets leaders and voters today to punt sacrifices to tomorrow’s taxpayers, and of course inflates college tuition prices so the borrowers have reduced purchasing power, as well as future users of the currency. That is the whole reason lending for college tuition became a thing. Some genius figured out how to cut taxes today while still being able to say they are helping expand access to higher education to poor people and college students.

lotsofpulp 4y ago

You missed the step where you take money from richer people, and then give that money to poorer people. Across all goods/services, that means richer people would be able to consume less, and poorer people would be able to consume more. Whether or not people sacrifice eating Dijon mustard is up to them. The goal is not to guarantee Dijon mustard for everyone, the goal is to mitigate how poor poorer people are. The other way to bring down Dijon mustard prices is for the government to increase supply of Dijon mustard, or remove whatever is restricting supply of Dijon mustard.