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Very little down side. People with more income spend more which grows the economy. In a two person economy, your expenditure is my income and my expenditure is

by jahnu 12y ago

Very little down side. People with more income spend more which grows the economy. In a two person economy, your expenditure is my income and my expenditure is your income. If one of us hoards then both of us lose eventually. Also moderate inflation is a good thing. It disincentivises hoarding of cash.

icebraining 12y ago
Also moderate inflation is a good thing. It disincentivises hoarding of cash. Another way to look at that is that it incentivises short-term investment in anything that brings returns above inflation, instead of allowing for capital to be saved up for more important projects.
drcomputer 12y ago
Do you think the same rules apply to an information economy?
- emodendroket 12y ago
  Why would they not?
  - drcomputer 12y ago
    I don't know. There always seem to be many alternate compositions of rules that can be used to define the environment while enforcing or altering the rule composition rules. Rules can define themselves, rules used to regulate the flow of information become information.
innguest 12y ago
That spending stimulates the economy is a fallacy. Standard economics defends that idea; but it is only true in a fairy-tale world where you have a magic money printing machine - like the world we are currently living in. In the real world you actually have to have savings first and foremost in order to produce the products that others will buy. Hoarding is a good thing since it frees the person to work on what they like, which is likely to benefit others. Also, money hoarded is usually invested in some instrument that might be benefiting other businesses. > In a two person economy, your expenditure is my income and my expenditure is your income. This is wrong. Imagine two people in an island. We elect that fish is money since it's the thing we all want and have a use for and can easily trade with each other. Now I fish 5 fish and put that in my savings account (a bucket of salt). As I spend this money, it does not become your income. You might be confusing the way governments characterize the economy with how a real world economy actually works in practice. > Also moderate inflation is a good thing. It disincentivises hoarding of cash. And moderate tax-evasion is a good think because it disincentivizes hoarding of cash by the government. This is wrong as well. Not to say morally wrong, as it's trying to steer people's financial decisions in a definite uniform direction (ie. spending). That sort of thinking is what had the US government almost shut down yesterday and have to inflate the money supply with $1.1 trillion more. It used to take us decades as a country to spend that much, but now it's only expected to last until September 2015. But we still have people saying moderate inflation is a good thing.

by jahnu 12y ago

icebraining 12y ago

Also moderate inflation is a good thing. It disincentivises hoarding of cash. Another way to look at that is that it incentivises short-term investment in anything that brings returns above inflation, instead of allowing for capital to be saved up for more important projects.

drcomputer 12y ago

Do you think the same rules apply to an information economy?

emodendroket 12y ago
Why would they not?
- drcomputer 12y ago
  I don't know. There always seem to be many alternate compositions of rules that can be used to define the environment while enforcing or altering the rule composition rules. Rules can define themselves, rules used to regulate the flow of information become information.

innguest 12y ago

That spending stimulates the economy is a fallacy. Standard economics defends that idea; but it is only true in a fairy-tale world where you have a magic money printing machine - like the world we are currently living in. In the real world you actually have to have savings first and foremost in order to produce the products that others will buy. Hoarding is a good thing since it frees the person to work on what they like, which is likely to benefit others. Also, money hoarded is usually invested in some instrument that might be benefiting other businesses. > In a two person economy, your expenditure is my income and my expenditure is your income. This is wrong. Imagine two people in an island. We elect that fish is money since it's the thing we all want and have a use for and can easily trade with each other. Now I fish 5 fish and put that in my savings account (a bucket of salt). As I spend this money, it does not become your income. You might be confusing the way governments characterize the economy with how a real world economy actually works in practice. > Also moderate inflation is a good thing. It disincentivises hoarding of cash. And moderate tax-evasion is a good think because it disincentivizes hoarding of cash by the government. This is wrong as well. Not to say morally wrong, as it's trying to steer people's financial decisions in a definite uniform direction (ie. spending). That sort of thinking is what had the US government almost shut down yesterday and have to inflate the money supply with $1.1 trillion more. It used to take us decades as a country to spend that much, but now it's only expected to last until September 2015. But we still have people saying moderate inflation is a good thing.