3 ms·
You're conflating several distinct things here: - The nominal quantity of money ("print trillions of dollars") - Aggregate demand ("buy everything in the wor
by consilient 3y ago
You're conflating several distinct things here:
- The nominal quantity of money ("print trillions of dollars")
- Aggregate demand ("buy everything in the world")
- The velocity of money ("give each resident a million dollars a month")
Increases in the quantity * velocity of money drive inflation in the long run: prices do not equilibrate immediately but have to be dragged up (or not, as the case may be) by supply and demand.
- jtbayly 3y agoSo what are the arguments for why not to just print as much money as the government needs? If many people believe printing trillions of dollars doesn’t matter, then I’d like to hear why. I’d like to not have taxes…
- closeparen 3y agoThe government needs money to buy goods and services. Extra cash chasing the same pool of goods and services is definitely inflationary. It also needs money to do weird, dark magic with bank balance sheets so that businesses can continue to acquire the capital to maintain and grow the supply of goods and services. It’s less clear what extra money sloshing around the financial system does. In the post-2008 era, people were freaking out about it not doing enough.
- influx 3y agoI appreciate your response, if I wanted to educate myself quickly here, is there a layman's textbook you would recommend?