2 ms·

> I see you're not the parent poster. That's the way HN works, and it's a good thing, but if you insist, here I am. It's true that governments don't see it th

by llimos 4y ago

> I see you're not the parent poster. That's the way HN works, and it's a good thing, but if you insist, here I am. It's true that governments don't see it the same way as households. But inflation provides them with a free way to reduce their debts (at the cost of their country's savers and earners, effectively). Every dollar not spent on servicing the debt can be spent on something else instead.

SideburnsOfDoom 4y ago
> Every dollar not spent on servicing the debt can be spent on something else instead. Point is, when it comes to households, you can meaningfully say "Every dollar not spent on $x can be spent on something else instead". When it comes to a government that controls the supply of dollars, that statement is not directly meaningful. There is no "every dollar" - the money supply is expanded or contracted when it's necessary and beneficial to do so. The misconception hasn't moved on since grandparent post. Can a government get this choice wrong? Sure. Does a government count dollars and allocate them like a household does? No. Is this spending "depleting the bank account" - not usually, it's literally circulating money into private hands. It depends on other factors like who gets it, do they pay taxes and what other public good is done thereby.
- llimos 4y ago
  > a government that controls the supply of dollars In most Western countries, this is the function of the central bank, not the government.
  - SideburnsOfDoom 4y ago
    While you are correct that "Central banks in most developed nations are institutionally independent from political interference" (1) But this is a) not in the private sector, it is acting to "manages the currency and monetary policy of a state" to "implement a country's chosen monetary policy" State. Country. b) more importantly, this is still utterly unlike a household, where no such function exists in any form. Thank you for the pedantry unrelated to any of the main points though. 1) https://en.wikipedia.org/wiki/Central_bank https://en.wikipedia.org/wiki/Central_bank

by llimos 4y ago

SideburnsOfDoom 4y ago

> Every dollar not spent on servicing the debt can be spent on something else instead. Point is, when it comes to households, you can meaningfully say "Every dollar not spent on $x can be spent on something else instead". When it comes to a government that controls the supply of dollars, that statement is not directly meaningful. There is no "every dollar" - the money supply is expanded or contracted when it's necessary and beneficial to do so. The misconception hasn't moved on since grandparent post. Can a government get this choice wrong? Sure. Does a government count dollars and allocate them like a household does? No. Is this spending "depleting the bank account" - not usually, it's literally circulating money into private hands. It depends on other factors like who gets it, do they pay taxes and what other public good is done thereby.

llimos 4y ago
> a government that controls the supply of dollars In most Western countries, this is the function of the central bank, not the government.
- SideburnsOfDoom 4y ago
  While you are correct that "Central banks in most developed nations are institutionally independent from political interference" (1) But this is a) not in the private sector, it is acting to "manages the currency and monetary policy of a state" to "implement a country's chosen monetary policy" State. Country. b) more importantly, this is still utterly unlike a household, where no such function exists in any form. Thank you for the pedantry unrelated to any of the main points though. 1) https://en.wikipedia.org/wiki/Central_bank https://en.wikipedia.org/wiki/Central_bank