It is natural. It’s something that is suppose to happen in a healthy economy. When businesses do well, they should increase wages, when wages increases demand for goods and services increases and supply decreases, when supply decreases cost goes up. That is inflation. It is normal when things are going correctly.
Currently everything is shitty and the Fed is throwing money at the economy to keep us out of a recession. They’ve been doing that since trumps first term and it’s the reason our debt is out of control.
It is natural. It’s something that is suppose to happen in a healthy economy. When businesses do well, they should increase wages, when wages increases demand for goods and services increases and supply decreases, when supply decreases cost goes up. That is inflation. It is normal when things are going correctly.
…
All of what you just said relies on an ever growing economy…
Something that on a (not even really consider how long humans have been around) long timeline isn’t possible.
It’s just not.
It’s like if Newton saw an apple fall from a tree, and immediately looked away before it hit the ground so he said that means gravity always accelerates a dropped item faster and faster and it will never stop even when the ground shows up it will just barrel thru the entire planet and out the other side…
The reason you think it can go on growing forever, is youre thinking on way too small of a timeline.
Like, that’s the main problem with today’s economy…
It doesn’t rely on ever growing economy. Again it’s normal. Ups and downs are normal. When demand pulls back due to high prices the economy is suppose to shrink, thereby going through something like a reset. The government tries to prevent that because people get mad when they lose their jobs and vote out whoever is in power at the time.
It is basic economics it has nothing to do with my ideology or ideas. You should check your ego because you think that every single country is dumber than you and hasn’t figured out how to balance their economies. Trust me you are not the first person on the planet to think about how to minimize or eliminate inflation.
when wages increases demand for goods and services increases
You slipped it in right there yourself. This consumerist mindset can only exist with infinite growth. It seems natural but that’s only because we’ve been immersed in growth for hundreds of years.
If I make $1 today and that dollar covers every necessity and basic luxury I could expect then there’s no reason I need to spend more. $2 can only provide diminishing returns on quality of life. I don’t need a second house because I get less than the X¢ of value from my primary residence for the cost of 2*X¢.
It’s reasonable for me to give that excess back in taxes/charity (allowing someone else the full $1 value) or even stash it in my mattress for a rainy day (deflationary pressure). The only reason for me to spend a portion on a second house [I’ll rarely use] or car [I won’t drive] or new hobby [I don’t have time for] is if advertising convinces me I’ll get $1+ QoL value from the purchase. But that’s a flat lie, as any study on happiness will tell you.
I don’t know where you’re getting this infinite growth idea. No one believes that or actually thinks that’s possible. You’re alluding to the fact that each CEO of a company cuts and cuts so that each quarter they can show growth but that has nothing to do with macroeconomics.
When people have money, they spend it. There are hundreds of years of consumer data to support that. The discovery of oil, the gold rush, the industrial revolution and countless other examples of periods of excess wealth that creates lots of jobs and lots of spending. You are also mentioning buying houses and multiple cars and stuff; that represents like 3% of the world population and shouldn’t even be brought up.
Also keep in mind we’re talking about real human beings. People with families and parents they need to take care of. It is only natural for a government to do what it can to minimize the effects of inflation so that people don’t go hungry or lose their jobs.
The discovery of oil, the gold rush, the industrial revolution and countless other examples of periods of excess wealth
These are all factors that drove down the value of goods & services via finite windfalls, negative externalities and production optimizations. Tapping an oil well is basically finding consumer goods in the ground and passing them around, with a bit of value sapped via supply chain inefficiency.
Currency is only a tool for distributing those goods & services, no more no less. You can’t give people “more money” unless there’s surplus goods to be had and a demand for them. If there’s not you’re just devaluing your currency.
I bring up excess houses and cars because they’re the most obvious and extravagant examples of inflating consumption for no benefit. 50 people can ride one bus or you can burn more resources to build 50 cars to marginally improve their lives. We should be thinking critically about the opportunity cost of 8 billion cars vs 160k busses.
It is only natural for a government to do what it can to minimize the effects of inflation
It should be the government’s job to ensure goods and services are fairly and humanely distributed and that labor is being directed toward that goal. Tailors shouldn’t be punished for working themselves out of a job, but we also shouldn’t be artificially inflating consumption just to keep their factories running. That path can only be sustained by irresponsible growth and aiming for X% inflation is a tool to encourage that.
Ive already explained it as simply as I can and have nothing to gain from trying any harder. Whether or not you understand this, or anything else… just doesn’t matter.
Congrats, you “win”. I’ll never explain anything to your account again.
It is natural. It’s something that is suppose to happen in a healthy economy. When businesses do well, they should increase wages, when wages increases demand for goods and services increases and supply decreases, when supply decreases cost goes up. That is inflation. It is normal when things are going correctly.
Currently everything is shitty and the Fed is throwing money at the economy to keep us out of a recession. They’ve been doing that since trumps first term and it’s the reason our debt is out of control.
…
All of what you just said relies on an ever growing economy…
Something that on a (not even really consider how long humans have been around) long timeline isn’t possible.
It’s just not.
It’s like if Newton saw an apple fall from a tree, and immediately looked away before it hit the ground so he said that means gravity always accelerates a dropped item faster and faster and it will never stop even when the ground shows up it will just barrel thru the entire planet and out the other side…
The reason you think it can go on growing forever, is youre thinking on way too small of a timeline.
Like, that’s the main problem with today’s economy…
It doesn’t rely on ever growing economy. Again it’s normal. Ups and downs are normal. When demand pulls back due to high prices the economy is suppose to shrink, thereby going through something like a reset. The government tries to prevent that because people get mad when they lose their jobs and vote out whoever is in power at the time.
It is basic economics it has nothing to do with my ideology or ideas. You should check your ego because you think that every single country is dumber than you and hasn’t figured out how to balance their economies. Trust me you are not the first person on the planet to think about how to minimize or eliminate inflation.
You slipped it in right there yourself. This consumerist mindset can only exist with infinite growth. It seems natural but that’s only because we’ve been immersed in growth for hundreds of years.
If I make $1 today and that dollar covers every necessity and basic luxury I could expect then there’s no reason I need to spend more. $2 can only provide diminishing returns on quality of life. I don’t need a second house because I get less than the X¢ of value from my primary residence for the cost of 2*X¢.
It’s reasonable for me to give that excess back in taxes/charity (allowing someone else the full $1 value) or even stash it in my mattress for a rainy day (deflationary pressure). The only reason for me to spend a portion on a second house [I’ll rarely use] or car [I won’t drive] or new hobby [I don’t have time for] is if advertising convinces me I’ll get $1+ QoL value from the purchase. But that’s a flat lie, as any study on happiness will tell you.
I don’t know where you’re getting this infinite growth idea. No one believes that or actually thinks that’s possible. You’re alluding to the fact that each CEO of a company cuts and cuts so that each quarter they can show growth but that has nothing to do with macroeconomics.
When people have money, they spend it. There are hundreds of years of consumer data to support that. The discovery of oil, the gold rush, the industrial revolution and countless other examples of periods of excess wealth that creates lots of jobs and lots of spending. You are also mentioning buying houses and multiple cars and stuff; that represents like 3% of the world population and shouldn’t even be brought up.
Also keep in mind we’re talking about real human beings. People with families and parents they need to take care of. It is only natural for a government to do what it can to minimize the effects of inflation so that people don’t go hungry or lose their jobs.
These are all factors that drove down the value of goods & services via finite windfalls, negative externalities and production optimizations. Tapping an oil well is basically finding consumer goods in the ground and passing them around, with a bit of value sapped via supply chain inefficiency.
Currency is only a tool for distributing those goods & services, no more no less. You can’t give people “more money” unless there’s surplus goods to be had and a demand for them. If there’s not you’re just devaluing your currency.
A day of labor is worth a day of labor, full stop. In 0 BCE that produced 1/4 of a shirt and today, through complex supply chains and efficient tools, it can produce 4000. But there’s a hard ceiling on the market for shirts (scaling with the number of backs). Unless you grow that market (more shirts per back or more backs), there’s no reason for the labor. This applies to every good and service. [Fun fact, there are something like 100 billion garments made every year. Those tailors should already be out of work for 5+ generations ]
I bring up excess houses and cars because they’re the most obvious and extravagant examples of inflating consumption for no benefit. 50 people can ride one bus or you can burn more resources to build 50 cars to marginally improve their lives. We should be thinking critically about the opportunity cost of 8 billion cars vs 160k busses.
It should be the government’s job to ensure goods and services are fairly and humanely distributed and that labor is being directed toward that goal. Tailors shouldn’t be punished for working themselves out of a job, but we also shouldn’t be artificially inflating consumption just to keep their factories running. That path can only be sustained by irresponsible growth and aiming for X% inflation is a tool to encourage that.
Ive already explained it as simply as I can and have nothing to gain from trying any harder. Whether or not you understand this, or anything else… just doesn’t matter.
Congrats, you “win”. I’ll never explain anything to your account again.