5 ms·

Inflation doesn't punish the poor. It punishes the savers. Balanced budget/deficit/surplus are tools and not goals. When the business don't/can't spend it is t

Inflation doesn't punish the poor. It punishes the savers. Balanced budget/deficit/surplus are tools and not goals. When the business don't/can't spend it is the government job to pick up the slack (deficit). And when business is investing it makes sense for the government to not compete for the same capital and labor with the private sector (balanced/surplus).

grey-area 13y ago
There are different kinds of inflation of course, and if you have high wage inflation then the poor won't really be punished more than others, but asset inflation and the early stages of inflation (as we have seen in this particular crisis) do punish the poor, who in general don't have: savings in assets other than cash the flexibility to switch between asset classes to avoid inflation large assets large debts secured on assets On top of that, too much inflation (asset or wage) does hurt everyone just as deflation does, so it is a balancing act, and simply printing more money whenever it is required is not a balanced policy. I don't agree with the current shutdown or manufactured crisis, but that's not an excuse to present money-printing as the magic solution to all government funding problems. Balanced budget/deficit/surplus are tools and not goals I disagree with that. It's fine to act in a counter-cyclical way as you have laid out above, and naively aiming for a balanced budget at all times would of course be damaging, but I do think a balanced budget and low inflation should be the explicit long-term goal of governments - otherwise the temptation is always to inflate their way out of difficulty, to start endless wars and never to pay down debts. If a crisis is required to borrow more, they'll invent one to do so.
BrandonMarc 13y ago
It punishes the poor because prices for goods and services rise much sooner than wages or salaries. Those making the lowest wages are hurt the most by this. If we are going to have a minimum wage, it would be a bit more sane to have it change automatically and regularly, pegged to inflation by some agreed-upon and not-constantly-screwed-around-with formula ... but that doesn't mean the BLS wouldn't fudge the numbers anyway, in order to help / hurt those in power.

grey-area 13y ago

There are different kinds of inflation of course, and if you have high wage inflation then the poor won't really be punished more than others, but asset inflation and the early stages of inflation (as we have seen in this particular crisis) do punish the poor, who in general don't have: savings in assets other than cash the flexibility to switch between asset classes to avoid inflation large assets large debts secured on assets On top of that, too much inflation (asset or wage) does hurt everyone just as deflation does, so it is a balancing act, and simply printing more money whenever it is required is not a balanced policy. I don't agree with the current shutdown or manufactured crisis, but that's not an excuse to present money-printing as the magic solution to all government funding problems. Balanced budget/deficit/surplus are tools and not goals I disagree with that. It's fine to act in a counter-cyclical way as you have laid out above, and naively aiming for a balanced budget at all times would of course be damaging, but I do think a balanced budget and low inflation should be the explicit long-term goal of governments - otherwise the temptation is always to inflate their way out of difficulty, to start endless wars and never to pay down debts. If a crisis is required to borrow more, they'll invent one to do so.

BrandonMarc 13y ago

It punishes the poor because prices for goods and services rise much sooner than wages or salaries. Those making the lowest wages are hurt the most by this. If we are going to have a minimum wage, it would be a bit more sane to have it change automatically and regularly, pegged to inflation by some agreed-upon and not-constantly-screwed-around-with formula ... but that doesn't mean the BLS wouldn't fudge the numbers anyway, in order to help / hurt those in power.