4 ms·
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
by 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 agoThis 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 agoI think the overreaction should not be viewed as "rational" from a hindsight perspective. Society should learn from its mistakes.
- yojo 4y agoWhen 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 agoNot 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 agoCalifornia 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 agoNot 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.