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"Inflation the Boogeyman"
versus
Inflation in reality
[#LearnMMT THREAD v1]
WARNING: Just by **reading this thread** you (yes you) are causing a tidal wave of inflation that no plumber can ever fix.
Good job. 👍
versus
Inflation in reality
[#LearnMMT THREAD v1]
WARNING: Just by **reading this thread** you (yes you) are causing a tidal wave of inflation that no plumber can ever fix.
Good job. 👍
2/ Those who do not understand #MMT, or do not want you to understand MMT, will say things like:
"Creating money causes inflation. Creating it beyond that causes hyperinflation."
So, creating one dollar 👉Inflation!
Daring to create that second dollar 👉 **hYpERinFlATiOn**!!!
"Creating money causes inflation. Creating it beyond that causes hyperinflation."
So, creating one dollar 👉Inflation!
Daring to create that second dollar 👉 **hYpERinFlATiOn**!!!
3/ The idea that
“Creating money causes inflation."
is as ridiculous as saying
“Birth causes crime."
I mean, all criminals are born, amiright?
“Creating money causes inflation."
is as ridiculous as saying
“Birth causes crime."
I mean, all criminals are born, amiright?
4/ Money creation has absolutely nothing to do with inflation. Only **spending money on fully employed resources** can possibly be inflationary.
(Where "fully employed" means, "No more people left to hire, no more products left for sale.")
(Where "fully employed" means, "No more people left to hire, no more products left for sale.")
5/ Inflation is not when the price of a single product goes up. It’s not when the price of all products in an entire industry go up.
Inflation one thing and one thing only: when the price of EVERY SINGLE PRODUCT for sale in a particular currency goes up and continues to go up.
Inflation one thing and one thing only: when the price of EVERY SINGLE PRODUCT for sale in a particular currency goes up and continues to go up.
6/ This is inflation. Is this a bad thing?
You have $50,000 in debt. Is that a bad thing? How can you tell? How many assets do you have? $107,000?
$107k - $50k = $57k *net worth*
So, in his particular case, $50k in debt is not a bad thing.
You need the full picture!
You have $50,000 in debt. Is that a bad thing? How can you tell? How many assets do you have? $107,000?
$107k - $50k = $57k *net worth*
So, in his particular case, $50k in debt is not a bad thing.
You need the full picture!
7/ This is inflation too. Is this a bad thing? Since your wages are keeping right up with prices, do you really care that the prices are going up?
8/ This is inflation too. Do you really care? In this case, you can more than cover the rise in prices.
9/ This is clearly a bad thing. But why is it a bad thing? Prices are not necessarily going up unreasonably, our wages are being kept artificially low! Our corrupt system is forcing us into poverty and private debt.
10/ Our wages have been suppressed since the early 1980s, even though our productivity continues to go up and up. (And just who benefits from that excess productivity? 😡🤬)
11/ This, too, is a bad thing. But, again, why? Prices are being raised artificially high. Our wages are now rising, but our corrupt system also allows companies to unfairly take advantage of us. This is price gouging.
12/ Inflation can also be a good thing! We can increase taxes on activities that cause pollution and climate change. Artificially increase the price for the greater good. It can be done the other way as well: decrease taxes on activities that prevent pollution and climate change.
13/ Here is actual inflation in the United States since 1960. The only substantial episode that has occurred was the 1970s OPEC oil supply shock. They withheld their product from us in retaliation for our support of Israel. This obviously has nothing to do with “creating money.”
14/ Beyond that, no inflation to be found!
And yet, during this entire time, every single dollar of federal spending was financed with created currency.
And yet, during this entire time, every single dollar of federal spending was financed with created currency.
15/ The point is this: "Inflation the Boogeyman" is totally different than inflation in reality.
We understand the nature of inflation. We have many tools to prevent, measure, and respond to it. We can set up automatic stabilizers to bypass fickle and corrupt politicians.
We understand the nature of inflation. We have many tools to prevent, measure, and respond to it. We can set up automatic stabilizers to bypass fickle and corrupt politicians.
16/ Finally, hyperinflation occurring in an economy such as the United States is not only unlikely, it’s absurd. Here is economist @FadhelKaboub on the specific example of Venezuela: inthesetimes.com/article/21660/…
17/ The primary tool (strongly) recommended by #MMT is the Federal Job Guarantee, which would prevent much of inflation, and set up many automatic stabilizers. Here is more information on the FJG and the scourge of involuntary unemployment that it solves.
18/ Here is a taste of inflation in reality, by #MMTers @stf18, @rohangrey, and @NathanTankus. ftalphaville.ft.com/2019/03/01/155…
19/ For more inflation-in-reality by #MMT economists, search for "inflation" and "[I*]" on this page. neweconomicperspectives.org/mmt-scholarship
20/ To learn more about Modern Monetary Theory (#MMT) in general, start here.
21/21 This thread is a first stab. Feedback appreciated! Anything important left out or misleading? 🙏
Dammit. Should be “amirite” not “amiright”. Grumble grumble.
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