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1) Yes but those business spent that money! On stuff, or services, or people! And spending drives prices up! 2) I agree it's a vast oversimplification, but the

1) Yes but those business spent that money! On stuff, or services, or people! And spending drives prices up! 2) I agree it's a vast oversimplification, but the point is that money was put in and prices went up. They went up by an amount surprisingly similar to the amount of additional cash available. It's totally an oversimplification, but do you have a better explanation? Like your theory is that corporations are greedy? Sure. Are they greedier than they were before? Are the checks on their greed - competition and consumer reluctance to buy higher cost products - suddenly absent? 3) For a possible explanation of the duration, I would direct your attention to: https://www.reddit.com/r/wallstreetbets/comments/zd4ppn/household_excess_savings_likely_gone_by_mid2023/ https://www.reddit.com/r/wallstreetbets/comments/zd4ppn/hous... Essentially regular people, on average, still have a lot more cash than they had before the pandemic. Generally speaking I'd say this is great but the fact is that this cash is not associated with any productivity increases, we have the same amount of stuff, but more cash. So prices go up.

danaris 4y ago
1) Sure, but that stimulus is not the money that went directly to people. I'm not entirely clear on whether you were making the distinction previously, but far too many people (some deliberately, most, I think, not) blur that line, and talk about the total stimulus when referring to the number (because it's big) and when referring to societal effects (because they're measurable)—but then turn around and talk about the individual stimulus payments as if they were all or a majority of that when talking about how we shouldn't just be handing out money to people, etc. 2) I did propose a better explanation: Coincidence. Two data points that look similar, in a situation like this, is not enough to make coincidence particularly unlikely. 3) The most likely explanation for that seems to be that, because of the pandemic, we're not doing a lot of the things we were normally doing before. My family certainly isn't: we haven't taken a vacation since winter 2019, and we've cut out many of our previous habits that a) cost money, and b) put us more at risk for COVID. Now, I believe my family is fairly far toward one end of that spectrum, but I also believe there are enough people who have cut out at least some stuff (and not put it back yet) that it is, at least, a highly likely explanation for the phenomenon you cite there.

danaris 4y ago

1) Sure, but that stimulus is not the money that went directly to people. I'm not entirely clear on whether you were making the distinction previously, but far too many people (some deliberately, most, I think, not) blur that line, and talk about the total stimulus when referring to the number (because it's big) and when referring to societal effects (because they're measurable)—but then turn around and talk about the individual stimulus payments as if they were all or a majority of that when talking about how we shouldn't just be handing out money to people, etc. 2) I did propose a better explanation: Coincidence. Two data points that look similar, in a situation like this, is not enough to make coincidence particularly unlikely. 3) The most likely explanation for that seems to be that, because of the pandemic, we're not doing a lot of the things we were normally doing before. My family certainly isn't: we haven't taken a vacation since winter 2019, and we've cut out many of our previous habits that a) cost money, and b) put us more at risk for COVID. Now, I believe my family is fairly far toward one end of that spectrum, but I also believe there are enough people who have cut out at least some stuff (and not put it back yet) that it is, at least, a highly likely explanation for the phenomenon you cite there.