3 ms·

> You can't print your way out of a crisis > without harming savers (retired) and > young people (lower skilled, less experienced). As a youngster I am tired

> You can't print your way out of a crisis > without harming savers (retired) and > young people (lower skilled, less experienced). As a youngster I am tired of hearing shit like this. Do you have any historical example to show? Because from what I've seen, post WWII countries came out of their crises riding protectionist policies rather than sacrificing their last generation or robbing their population. Like Korea.

speeder 13y ago
Here in Brazil, the last attempt to print its way out of a crisis resulted into 2000% inflation. The government in late 1993 and early 1994 then created a new currency, that would be pegged 1:1 with USD (later the pegging was removed, now it is about 2.2:1 ), and with limited supply. Also a bit time earlier, a president REMOVED money from people savings, literally (ie: he told banks to set the saving accounts to zero, and that is it). This, along with some new laws about government spending fixed inflation and allowed the economy to run smoothly again. Then around the 2000s, when the leftist government arose, they decided to solve poverty again by printing money and giving to the poor, at first it seemly worked, with GDP growth peaking at around 8% in a year, and millions of people leaving poverty and entering what here is called "lower middle class" (actually, in US that would still be considered poverty... here "lower middle class" is if you can rent something, and pay your own food, but rely on government services to education, health and transportation). The popularity of the socialist government soared (it reached around 70% at its peak, that also peaked during the 8% growth year)... Then we have currently 6.7% of yearly inflation (year to date data), 0.9% of GDP growth (2012 data) and most of the inflation drivers is housing costs and food (exactly the things that the "new middle class" could afford). Now the government approval is 30% and we have already 5 weeks of protests and strikes that never end, totally widespread, even to some crucial sectors (ie: several states have the police threatening to strike, and there are also threats of a military police strike, that is kinda ludicrous, because as military they cannot legally strike, and more than one high ranking officer of the army threatened a coup, with a general writing a anti-government text and all) Printing your way out of crisis, only result in a sort of roller coaster economy, it booms and suddenly bust, at first, people with the influx of money start to spend a lot, and people build business to attend to them, then all this influx money result in inflation, suddenly the economy start sputtering, as inflation rises faster than GDP growth, and particularly food and housing inflation rises faster than wages and government welfare, and you have a vicious cycle of needing to print more money to save the population that spends this money and generate more inflation, and your real wealth creation sink. EDIT: Oh, striker truckers are awesome too, because they are just parking their trucks in the middle of the highways and fucking up everything... Never piss off truckers when your economy rely completely on them because your trains are shit or non-existant.
- _delirium 13y ago
  > Printing your way out of crisis, only result in a sort of roller coaster economy That can happen in similar situations if you don't as well, though. Greece's typical response to financial crises until recently was currency devaluation, i.e. massive but controlled step-function inflation. That certainly has a lot of downsides. But now that Greece is in the Eurozone, it can't do that. Even post-crisis, the inflation is very low; there is even deflation if you look at local baskets of goods. But that has not kept the economy off of the roller-coaster. It's just been a different roller coaster, and likely a worse one (in the previous crises, Greece never had 65% youth unemployment).

speeder 13y ago

Here in Brazil, the last attempt to print its way out of a crisis resulted into 2000% inflation. The government in late 1993 and early 1994 then created a new currency, that would be pegged 1:1 with USD (later the pegging was removed, now it is about 2.2:1 ), and with limited supply. Also a bit time earlier, a president REMOVED money from people savings, literally (ie: he told banks to set the saving accounts to zero, and that is it). This, along with some new laws about government spending fixed inflation and allowed the economy to run smoothly again. Then around the 2000s, when the leftist government arose, they decided to solve poverty again by printing money and giving to the poor, at first it seemly worked, with GDP growth peaking at around 8% in a year, and millions of people leaving poverty and entering what here is called "lower middle class" (actually, in US that would still be considered poverty... here "lower middle class" is if you can rent something, and pay your own food, but rely on government services to education, health and transportation). The popularity of the socialist government soared (it reached around 70% at its peak, that also peaked during the 8% growth year)... Then we have currently 6.7% of yearly inflation (year to date data), 0.9% of GDP growth (2012 data) and most of the inflation drivers is housing costs and food (exactly the things that the "new middle class" could afford). Now the government approval is 30% and we have already 5 weeks of protests and strikes that never end, totally widespread, even to some crucial sectors (ie: several states have the police threatening to strike, and there are also threats of a military police strike, that is kinda ludicrous, because as military they cannot legally strike, and more than one high ranking officer of the army threatened a coup, with a general writing a anti-government text and all) Printing your way out of crisis, only result in a sort of roller coaster economy, it booms and suddenly bust, at first, people with the influx of money start to spend a lot, and people build business to attend to them, then all this influx money result in inflation, suddenly the economy start sputtering, as inflation rises faster than GDP growth, and particularly food and housing inflation rises faster than wages and government welfare, and you have a vicious cycle of needing to print more money to save the population that spends this money and generate more inflation, and your real wealth creation sink. EDIT: Oh, striker truckers are awesome too, because they are just parking their trucks in the middle of the highways and fucking up everything... Never piss off truckers when your economy rely completely on them because your trains are shit or non-existant.

_delirium 13y ago
> Printing your way out of crisis, only result in a sort of roller coaster economy That can happen in similar situations if you don't as well, though. Greece's typical response to financial crises until recently was currency devaluation, i.e. massive but controlled step-function inflation. That certainly has a lot of downsides. But now that Greece is in the Eurozone, it can't do that. Even post-crisis, the inflation is very low; there is even deflation if you look at local baskets of goods. But that has not kept the economy off of the roller-coaster. It's just been a different roller coaster, and likely a worse one (in the previous crises, Greece never had 65% youth unemployment).