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You are 100% right of course. Inflation is a monetary phenomenon. The money comes from our government spending on credit. There are lots of people on here drink

You are 100% right of course. Inflation is a monetary phenomenon. The money comes from our government spending on credit. There are lots of people on here drinking the Kool-Aid on this topic. There's no easy solution to the problem, and it is very hard to get the indoctrinated to understand where the problem truly lies.

WalterBright 2y ago
> it is very hard to get the indoctrinated to understand where the problem truly lies There are an awful lot of people that benefit from the deficit spending, so they have a major incentive to blame inflation on something (anything) else. The usual suspects are: 1. corporate greed 2. union greed 3. oligarchs 4. supply chain disruption 5. oil companies 6. Arab countries 7. Putin's price hike
mindslight 2y ago
> The money comes from our government spending on credit. There are lots of people on here drinking the Kool-Aid on this topic. And you're serving more Kool-Aid. Deficit spending is merely one form of monetary creation. The bigger one is cheap loans from the Federal Reserve to banks, which is responsible for the ongoing housing, stock, and other asset bubbles. The Fed's technocratic mandate declares that price inflation must happen regardless. Myopically focusing on "deficit spending" merely hamstrings the Legislative/Executive's ability to spend money for directed deliberate purposes, leaving more for the Reserve to hand out to the financial industry and existing asset holders.
- wakawaka28 2y ago
  >Deficit spending is merely one form of monetary creation. The bigger one is cheap loans from the Federal Reserve to banks, which is responsible for the ongoing housing, stock, and other asset bubbles. Yes you are technically right, the Federal Reserve (a part of the government) issues credit and puts money into the economy. >The Fed's technocratic mandate declares that price inflation must happen regardless. Myopically focusing on "deficit spending" merely hamstrings the Legislative/Executive's ability to spend money for directed deliberate purposes, leaving more for the Reserve to hand out to the financial industry and existing asset holders. You're putting a spin on it that I can't stand. Are there other modes of money creation? Yes, and all tie back to the government itself. The government is the primary beneficiary of money creation because it has the largest debt and it creates the money, and forces everyone to accept it at gunpoint.
  - mindslight 2y ago
    > Are there other modes of money creation? Yes, and all tie back to the government itself. Yes, but surely you can see that the different mechanisms by which the government creates money (and the subsequent destinations for the new money) will each have their own resulting effects. By driving the focus on to only one of them ("deficit spending") while tacitly giving the other(s) a pass, you're actually advocating for a specific course of ongoing government intervention (aka "policy") - especially while the unquestioned overall policy is such that diminishing one will automatically increase another.
    - wakawaka28 2y ago
      I'm not giving anything a blanket pass. The problem is ultimately government policy. If the Federal Reserve issues credit for worthwhile private banking endeavors, it is much more likely to be productive than anything the government spends money on. >[...] especially while the unquestioned overall policy is such that diminishing one will automatically increase another. I think it's wrong to take that for granted.
      - mindslight 2y ago
        > The problem is ultimately government policy Yes, which is why I am trying to discuss the effects of different government policies. Stopping at "the problem is government" only makes sense if you're taking a principled approach of rejecting all government intervention, which you're not doing. Your argument is framed as if it's coming from that position, but you've been skipping criticism of the largest source of monetary creation which is why I've been saying you've been giving it a pass. > I think it's wrong to take that for granted. This is literally just a pillar of the Federal Reserve's explicit mandate. If monetary inflation from the deficit isn't high enough to create the target price inflation, then the Fed steps in and lowers interest rates to create enough monetary inflation to make up the difference. > If the Federal Reserve issues credit for worthwhile private banking endeavors, it is much more likely to be productive than anything the government spends money on. Okay, thank you for finally expressing a judgement between different government interventions for creating price inflation. I completely disagree with your statement (I'd say that giving new money to "banking endeavors" mostly just goes to driving up the leveraged-everything bubble). But at least now that you've actually made the argument explicitly (rather than having it be implicit from a whole host of unvisited assumptions), we can even just agree to disagree.

WalterBright 2y ago

> it is very hard to get the indoctrinated to understand where the problem truly lies There are an awful lot of people that benefit from the deficit spending, so they have a major incentive to blame inflation on something (anything) else. The usual suspects are: 1. corporate greed 2. union greed 3. oligarchs 4. supply chain disruption 5. oil companies 6. Arab countries 7. Putin's price hike

mindslight 2y ago

> The money comes from our government spending on credit. There are lots of people on here drinking the Kool-Aid on this topic. And you're serving more Kool-Aid. Deficit spending is merely one form of monetary creation. The bigger one is cheap loans from the Federal Reserve to banks, which is responsible for the ongoing housing, stock, and other asset bubbles. The Fed's technocratic mandate declares that price inflation must happen regardless. Myopically focusing on "deficit spending" merely hamstrings the Legislative/Executive's ability to spend money for directed deliberate purposes, leaving more for the Reserve to hand out to the financial industry and existing asset holders.

wakawaka28 2y ago
>Deficit spending is merely one form of monetary creation. The bigger one is cheap loans from the Federal Reserve to banks, which is responsible for the ongoing housing, stock, and other asset bubbles. Yes you are technically right, the Federal Reserve (a part of the government) issues credit and puts money into the economy. >The Fed's technocratic mandate declares that price inflation must happen regardless. Myopically focusing on "deficit spending" merely hamstrings the Legislative/Executive's ability to spend money for directed deliberate purposes, leaving more for the Reserve to hand out to the financial industry and existing asset holders. You're putting a spin on it that I can't stand. Are there other modes of money creation? Yes, and all tie back to the government itself. The government is the primary beneficiary of money creation because it has the largest debt and it creates the money, and forces everyone to accept it at gunpoint.
- mindslight 2y ago
  > Are there other modes of money creation? Yes, and all tie back to the government itself. Yes, but surely you can see that the different mechanisms by which the government creates money (and the subsequent destinations for the new money) will each have their own resulting effects. By driving the focus on to only one of them ("deficit spending") while tacitly giving the other(s) a pass, you're actually advocating for a specific course of ongoing government intervention (aka "policy") - especially while the unquestioned overall policy is such that diminishing one will automatically increase another.
  - wakawaka28 2y ago
    I'm not giving anything a blanket pass. The problem is ultimately government policy. If the Federal Reserve issues credit for worthwhile private banking endeavors, it is much more likely to be productive than anything the government spends money on. >[...] especially while the unquestioned overall policy is such that diminishing one will automatically increase another. I think it's wrong to take that for granted.
    - mindslight 2y ago
      > The problem is ultimately government policy Yes, which is why I am trying to discuss the effects of different government policies. Stopping at "the problem is government" only makes sense if you're taking a principled approach of rejecting all government intervention, which you're not doing. Your argument is framed as if it's coming from that position, but you've been skipping criticism of the largest source of monetary creation which is why I've been saying you've been giving it a pass. > I think it's wrong to take that for granted. This is literally just a pillar of the Federal Reserve's explicit mandate. If monetary inflation from the deficit isn't high enough to create the target price inflation, then the Fed steps in and lowers interest rates to create enough monetary inflation to make up the difference. > If the Federal Reserve issues credit for worthwhile private banking endeavors, it is much more likely to be productive than anything the government spends money on. Okay, thank you for finally expressing a judgement between different government interventions for creating price inflation. I completely disagree with your statement (I'd say that giving new money to "banking endeavors" mostly just goes to driving up the leveraged-everything bubble). But at least now that you've actually made the argument explicitly (rather than having it be implicit from a whole host of unvisited assumptions), we can even just agree to disagree.