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Isn't inflation only caused by governments spending money only if money is printed in the process? Otherwise, it's just a re-allocation of money within a fixed

by jkukul 4y ago

Isn't inflation only caused by governments spending money only if money is printed in the process? Otherwise, it's just a re-allocation of money within a fixed budget. E.g. instead of money being allocated to building a new road it is allocated to subsidising train rides. The supply of money doesn't increase.

pclmulqdq 4y ago
Increasing subsidies that are used by poor and middle-class households seems to have a stronger effect than subsidizing rich people. Their money tends to have higher velocity (instead of throwing it into the stock market and waiting, they will use it to buy necessities), which leads to more total dollars spent per year from $1 of subsidies.
- jkukul 4y ago
  You're right. The point I was trying to make is that subsidising poor and middle-class by re-allocating resources is better than printing money to give stimulus checks.
- oceanplexian 4y ago
  Maybe people in poverty are different where you live. Where I am it's a lifestyle, where every spare dollar is spent on drugs, alcohol, and gambling at the nearby casino. I guess it helps the economy, but probably not the parts of the economy society should be investing in.
  - manuelabeledo 4y ago
    Where do you live? It sounds like they are having a lot of fun there and you don’t like it.
- ClumsyPilot 4y ago
  > Increasing subsidies that are used by poor and middle-class households seems to have a stronger effect than subsidizing rich people. Subsidising rich people increases asset prices, share prices and house prices, and affects us all
capableweb 4y ago
Inflation happens because of many reasons, not just one reason, or "only". Which ones are currently affecting is, is up for debate, but it's surely not just one reason. You can start diving deeper into the subject at Wikipedia that has somewhat of an overview: https://en.wikipedia.org/wiki/Inflation#Causes https://en.wikipedia.org/wiki/Inflation#Causes

by jkukul 4y ago

pclmulqdq 4y ago

Increasing subsidies that are used by poor and middle-class households seems to have a stronger effect than subsidizing rich people. Their money tends to have higher velocity (instead of throwing it into the stock market and waiting, they will use it to buy necessities), which leads to more total dollars spent per year from $1 of subsidies.

jkukul 4y ago
You're right. The point I was trying to make is that subsidising poor and middle-class by re-allocating resources is better than printing money to give stimulus checks.
oceanplexian 4y ago
Maybe people in poverty are different where you live. Where I am it's a lifestyle, where every spare dollar is spent on drugs, alcohol, and gambling at the nearby casino. I guess it helps the economy, but probably not the parts of the economy society should be investing in.
- manuelabeledo 4y ago
  Where do you live? It sounds like they are having a lot of fun there and you don’t like it.
ClumsyPilot 4y ago
> Increasing subsidies that are used by poor and middle-class households seems to have a stronger effect than subsidizing rich people. Subsidising rich people increases asset prices, share prices and house prices, and affects us all

capableweb 4y ago

Inflation happens because of many reasons, not just one reason, or "only". Which ones are currently affecting is, is up for debate, but it's surely not just one reason. You can start diving deeper into the subject at Wikipedia that has somewhat of an overview: https://en.wikipedia.org/wiki/Inflation#Causes https://en.wikipedia.org/wiki/Inflation#Causes