5 ms·

I mean if it helps them pretend that helicopter money can't possibly have any negative second order effects then they'll believe whatever you tell them.

dlp211 3y ago
Yes, after 2 decades of screeching from the "helicopter money" crowd, we suffered a short bout of inflation. A reminder: Inflation is a hardship, a short one in this instance, unemployment is a crisis.
- throwaway167 3y ago
  And requiring a job a tradegy.
  - a_gnostic 3y ago
    The woes of entropy.
- listenallyall 3y ago
  > Inflation is a hardship, a short one in this instance Excess inflation represents permanent hardship. Inflation is a growth rate -- if it is 2% every year, then spikes suddenly to 8% for a year, and goes right back to 2%, that excess 6% is permanently embedded in prices in all future years. (very simplified example, but the concept is valid)
  - jcparkyn 3y ago
    But in the long run, wages will increase to catch up (unless there is an external force keeping them lower than they once were). Put another way, we don't suddenly have 6% fewer goods and services for the rest of eternity just because the value of the dollar changed.
    - listenallyall 3y ago
      No. Rising wages are often the cause of high inflation, but wages do not increase as a result of high inflation. The harm from high inflation can be measured as increases in alternative (non-earning) methods of accessing money -- low savings rates, high credit card balances (and delinquencies), high levels of borrowing from 401k's (or low contribution rates), tapping into home equity -- which is exactly what we are witnessing now, not coincidentally, right after the biggest inflation spike in decades.
      - jcparkyn 3y ago
        I won't pretend to be an expert on the matter, but I'm not very convinced by your argument. > [...] wages do not increase as a result of high inflation Not in the short term, sure. But if the cause of the inflation isn't something permanent, labour is still (somewhat) subject to the same market equilibrium (in real terms) as it was before the inflation. There are some major caveats here (e.g. wage stickiness), but we're talking long-term. > which is exactly what we are witnessing now I don't disagree, but again this isn't long-term. I assume you wouldn't expect these effects to last for the rest of eternity (assuming inflation returned to 2% and stayed there)?
        listenallyall 3y ago
        I'm not sure what market equilibrium you're referring to. If things always balanced out in the long-term, our economic situation would resemble the 1950's or 60's, where a single-income household could comfortably afford a suburban house and raise kids. Instead, we have people living under their parents' roof until 30 or longer, enormous college debt loads, majority of families relying on two incomes (and often, one or both parents moonlighting at a second job), housing costs taking a larger slice of total incomes than ever before, married couples refraining from having kids as an economic decision, more people than ever relying on some form of government subsidy. None of these factors would be growing if some long-term equilibrium existed, because at some point, we'd be reverting to the mean. Instead, society's lifestyles have slowly shifted in response to the fact that, over the long-term, producers have become increasingly effective at extracting a larger and larger share of consumers' incomes, and ultimately, realized and potential wealth.

dlp211 3y ago

Yes, after 2 decades of screeching from the "helicopter money" crowd, we suffered a short bout of inflation. A reminder: Inflation is a hardship, a short one in this instance, unemployment is a crisis.

throwaway167 3y ago
And requiring a job a tradegy.
- a_gnostic 3y ago
  The woes of entropy.
listenallyall 3y ago
> Inflation is a hardship, a short one in this instance Excess inflation represents permanent hardship. Inflation is a growth rate -- if it is 2% every year, then spikes suddenly to 8% for a year, and goes right back to 2%, that excess 6% is permanently embedded in prices in all future years. (very simplified example, but the concept is valid)
- jcparkyn 3y ago
  But in the long run, wages will increase to catch up (unless there is an external force keeping them lower than they once were). Put another way, we don't suddenly have 6% fewer goods and services for the rest of eternity just because the value of the dollar changed.
  - listenallyall 3y ago
    No. Rising wages are often the cause of high inflation, but wages do not increase as a result of high inflation. The harm from high inflation can be measured as increases in alternative (non-earning) methods of accessing money -- low savings rates, high credit card balances (and delinquencies), high levels of borrowing from 401k's (or low contribution rates), tapping into home equity -- which is exactly what we are witnessing now, not coincidentally, right after the biggest inflation spike in decades.
    - jcparkyn 3y ago
      I won't pretend to be an expert on the matter, but I'm not very convinced by your argument. > [...] wages do not increase as a result of high inflation Not in the short term, sure. But if the cause of the inflation isn't something permanent, labour is still (somewhat) subject to the same market equilibrium (in real terms) as it was before the inflation. There are some major caveats here (e.g. wage stickiness), but we're talking long-term. > which is exactly what we are witnessing now I don't disagree, but again this isn't long-term. I assume you wouldn't expect these effects to last for the rest of eternity (assuming inflation returned to 2% and stayed there)?
      - listenallyall 3y ago
        I'm not sure what market equilibrium you're referring to. If things always balanced out in the long-term, our economic situation would resemble the 1950's or 60's, where a single-income household could comfortably afford a suburban house and raise kids. Instead, we have people living under their parents' roof until 30 or longer, enormous college debt loads, majority of families relying on two incomes (and often, one or both parents moonlighting at a second job), housing costs taking a larger slice of total incomes than ever before, married couples refraining from having kids as an economic decision, more people than ever relying on some form of government subsidy. None of these factors would be growing if some long-term equilibrium existed, because at some point, we'd be reverting to the mean. Instead, society's lifestyles have slowly shifted in response to the fact that, over the long-term, producers have become increasingly effective at extracting a larger and larger share of consumers' incomes, and ultimately, realized and potential wealth.