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Inflation is because of the money printing. We have the same amount of assets, but suddenly there is over triple the amount of money floating around. More dema

Inflation is because of the money printing. We have the same amount of assets, but suddenly there is over triple the amount of money floating around. More demand, but the same supply of resources means prices go up. Take a look at the feds balance sheet in 2008 and compare with now (https://fred.stlouisfed.org/series/WALCL https://fred.stlouisfed.org/series/WALCL) It's no surprise we've had a bull run for over ten years.

s1artibartfast 3y ago
Again, I agree with most everything of what you say, but how it connects to inflation. Printing money only leads to consumer good inflation when it circulates and gets into consumer hands. If you print the money and put it in the incinerator, you have no inflation. If you put it in a mattress, no inflation. If you print money and put it in APPL stock, no inflation. However, When you pay nurses, construction workers, software devs, and other workers, then you get consumer goods inflation. The problem with printing money is the trickle down effect. Like you said, it is supply and demand. AAPL corp or Jeff Bezos are not walking into a grocery store and buying all the butter. Prices go up when your worker is willing to pay more for butter. For some reason, many people think that if only we taxed the rich and gave it to workers to spend, then the price of butter would go down in the market. This is insane.
- Xeoncross 3y ago
  I think you're discounting how connected everything is. When you buy XYZ stock the company is able to borrow more and at better rates. They are able to attract buyouts, pay higher salaries, hire more employees and generally spend more in a number of ways. When individuals like Jeff Bezos add another zero to their net worth they are able to borrow against their own stock holdings as well as are more likely to splurge on other things (like his new yacht) such as funding Blue Origin and Project Kuiper so Musk doesn't pass him as the richest man in the world. All this results in more money spent and entering the economy ultimately trickling down to purchases of milk, bread and starter homes while making many other stops along the way.
  - s1artibartfast 3y ago
    Again, I 100% agree on the connectedness of the economy and trickle down effect. If I understand you correctly, I think where we disagree is the effect of Taxation. If the government tax the wealthy and incinerated it, then yes, I agree that would reduce job growth, wage competition, and inflation. However, if taxes are increased and the money is distributed directly to the workers, I would expect this to increase inflation. Do you think job creation from capital reinvestment is a stronger driver of inflation then putting that money in consumer pockets? The only ways to reduce inflation is to increase product Supply or reduce demand. I don't think that taxing the wealthy will increase Supply and I do think that giving workers more monetary transfers or a lower tax burden increases demand. You simply can't reduce inflation and while increasing consumer purchasing power while holding supply constant.
    - Xeoncross 3y ago
      I too agree with your comment, I must be missing more context. > if taxes are increased and the money is distributed directly to the workers This is unlikely, taxes and laws are always overseen by lobbyists who are funded by the wealthy. I can't imagine a situation where they would vote themselves into a worse situation. If they ever appear to, know the harm they face would be to their advantage (such as crushing startup competition or preventing litigation). Perhaps this seems like an overly jaded take, but please reference this Princeton study that found the wishes of the US population have had no real effect on laws for decades. https://scholar.princeton.edu/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf https://scholar.princeton.edu/sites/default/files/mgilens/fi... TL;DR: https://imgur.com/a/tvqQXFc https://imgur.com/a/tvqQXFc
      - s1artibartfast 3y ago
        I'm not sure I agree with that cynical of a take, but even if is true, I don't see how moving money from one wealthy person to another would be an effective tool to fight inflation. Furthermore, I don't think that is the underlying assumption held by people who say we should tax the rich to fight inflation.

s1artibartfast 3y ago

Again, I agree with most everything of what you say, but how it connects to inflation. Printing money only leads to consumer good inflation when it circulates and gets into consumer hands. If you print the money and put it in the incinerator, you have no inflation. If you put it in a mattress, no inflation. If you print money and put it in APPL stock, no inflation. However, When you pay nurses, construction workers, software devs, and other workers, then you get consumer goods inflation. The problem with printing money is the trickle down effect. Like you said, it is supply and demand. AAPL corp or Jeff Bezos are not walking into a grocery store and buying all the butter. Prices go up when your worker is willing to pay more for butter. For some reason, many people think that if only we taxed the rich and gave it to workers to spend, then the price of butter would go down in the market. This is insane.

Xeoncross 3y ago
I think you're discounting how connected everything is. When you buy XYZ stock the company is able to borrow more and at better rates. They are able to attract buyouts, pay higher salaries, hire more employees and generally spend more in a number of ways. When individuals like Jeff Bezos add another zero to their net worth they are able to borrow against their own stock holdings as well as are more likely to splurge on other things (like his new yacht) such as funding Blue Origin and Project Kuiper so Musk doesn't pass him as the richest man in the world. All this results in more money spent and entering the economy ultimately trickling down to purchases of milk, bread and starter homes while making many other stops along the way.
- s1artibartfast 3y ago
  Again, I 100% agree on the connectedness of the economy and trickle down effect. If I understand you correctly, I think where we disagree is the effect of Taxation. If the government tax the wealthy and incinerated it, then yes, I agree that would reduce job growth, wage competition, and inflation. However, if taxes are increased and the money is distributed directly to the workers, I would expect this to increase inflation. Do you think job creation from capital reinvestment is a stronger driver of inflation then putting that money in consumer pockets? The only ways to reduce inflation is to increase product Supply or reduce demand. I don't think that taxing the wealthy will increase Supply and I do think that giving workers more monetary transfers or a lower tax burden increases demand. You simply can't reduce inflation and while increasing consumer purchasing power while holding supply constant.
  - Xeoncross 3y ago
    I too agree with your comment, I must be missing more context. > if taxes are increased and the money is distributed directly to the workers This is unlikely, taxes and laws are always overseen by lobbyists who are funded by the wealthy. I can't imagine a situation where they would vote themselves into a worse situation. If they ever appear to, know the harm they face would be to their advantage (such as crushing startup competition or preventing litigation). Perhaps this seems like an overly jaded take, but please reference this Princeton study that found the wishes of the US population have had no real effect on laws for decades. https://scholar.princeton.edu/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf https://scholar.princeton.edu/sites/default/files/mgilens/fi... TL;DR: https://imgur.com/a/tvqQXFc https://imgur.com/a/tvqQXFc
    - s1artibartfast 3y ago
      I'm not sure I agree with that cynical of a take, but even if is true, I don't see how moving money from one wealthy person to another would be an effective tool to fight inflation. Furthermore, I don't think that is the underlying assumption held by people who say we should tax the rich to fight inflation.