4 ms·

Was it a mistake to drop interest rates to 0 and give out free money to business owners during a pandemic? I think monetary and fiscal policy overreacted to the

Was it a mistake to drop interest rates to 0 and give out free money to business owners during a pandemic? I think monetary and fiscal policy overreacted to the pandemic, but we'll never hear from anyone in power that it was a mistake. I don't think our government leaders have learned anything.

testfoobar 4y ago
It was a massive over reaction and a massive mistake. Inflation now is a direct consequence of indiscriminate spending. Politicians do not seem to understand basic economics. E.g. California's inflation relief checks going out right now.
- yojo 4y ago
  This is correct in hindsight. At the time, a lot of smart people were forecasting economic armageddon. Businesses screwed up too; big, well financed companies like Airbnb did massive layoffs. My superhost acquaintance went on to have her best year ever. None of this excuses the lack of oversight, but the initial overreaction may have been rational. Inflation related stimulus is of course farcical.
  - fasteddie31003 4y ago
    I think the overreaction should not be viewed as "rational" from a hindsight perspective. Society should learn from its mistakes.
    - yojo 4y ago
      When you have a systemic shock with unknown impact, rational can still be ultimately wrong. If there’s a 50% chance of total economic meltdown, and you can avert it with a few years of high inflation, that might still be the correct decision, even if the doomsday scenario doesn’t come true.
      - namarie 4y ago
        Not to mention that we'll never know for sure whether the doomsday scenario would have come true or not. So it might still have been a good response.
- paxys 4y ago
  California isn’t printing money for these checks like the federal government did. It is all coming from the budget surplus, and is not going to have a meaningful effect on inflation.
  - testfoobar 4y ago
    Not true. If California were to use the surplus to retire debt, it would reduce inflationary forces in the economy. By distributing the money back out, the State of California will contribute to inflation.
onlyrealcuzzo 4y ago
> I don't think our government leaders have learned anything. The next group of politicians will have "learned" from this - in the sense that people will have voted them in based on whatever random views they had that matched with how the will of the people has changed. I doubt existing politicians ever learn anything. Especially when our politicians pride themselves on "not flipping" on views. How are you supposed to learn anything if you never change your mind? We don't elect people who learn. We elect people who we think are always right (charlatans). I skeptical the people we elect in next will have any better ideas, because I don't think "we" learned anything from this either.

testfoobar 4y ago

It was a massive over reaction and a massive mistake. Inflation now is a direct consequence of indiscriminate spending. Politicians do not seem to understand basic economics. E.g. California's inflation relief checks going out right now.

yojo 4y ago
This is correct in hindsight. At the time, a lot of smart people were forecasting economic armageddon. Businesses screwed up too; big, well financed companies like Airbnb did massive layoffs. My superhost acquaintance went on to have her best year ever. None of this excuses the lack of oversight, but the initial overreaction may have been rational. Inflation related stimulus is of course farcical.
- fasteddie31003 4y ago
  I think the overreaction should not be viewed as "rational" from a hindsight perspective. Society should learn from its mistakes.
  - yojo 4y ago
    When you have a systemic shock with unknown impact, rational can still be ultimately wrong. If there’s a 50% chance of total economic meltdown, and you can avert it with a few years of high inflation, that might still be the correct decision, even if the doomsday scenario doesn’t come true.
    - namarie 4y ago
      Not to mention that we'll never know for sure whether the doomsday scenario would have come true or not. So it might still have been a good response.
paxys 4y ago
California isn’t printing money for these checks like the federal government did. It is all coming from the budget surplus, and is not going to have a meaningful effect on inflation.
- testfoobar 4y ago
  Not true. If California were to use the surplus to retire debt, it would reduce inflationary forces in the economy. By distributing the money back out, the State of California will contribute to inflation.

onlyrealcuzzo 4y ago

> I don't think our government leaders have learned anything. The next group of politicians will have "learned" from this - in the sense that people will have voted them in based on whatever random views they had that matched with how the will of the people has changed. I doubt existing politicians ever learn anything. Especially when our politicians pride themselves on "not flipping" on views. How are you supposed to learn anything if you never change your mind? We don't elect people who learn. We elect people who we think are always right (charlatans). I skeptical the people we elect in next will have any better ideas, because I don't think "we" learned anything from this either.