Comment on All the data so far is showing inflation isn't going away, and is making things tough on the Fed
chicken@lemmy.dbzer0.com 5 months agoit will never make a lot of sense because the leaders who control a currency always use it to their benefit
It is true that there is a lot of misleading propaganda about money in the media. It isn’t true that money is purely a conspiracy of the wealthy and follows no other logic than their interests (though, granted, government economic policy does prioritize their interests). Economics is real.
Taxes never fund a government. Taxes are one of the tools to create demand for a currency. But a government creates it’s own currency, why would they need tax revenue to spend when they are the ones creating money? This would be like saying we can’t mail anymore because we ran out of stamps. The limiting factor for how much we produce is manpower, never money.
Does this contradict what I’ve argued? I’m not seeing the connection.
gastationsushi@lemmy.world 5 months ago
You originally made the argument about spending and inflation. It implies money is limited resource to a central bank.
chicken@lemmy.dbzer0.com 5 months ago
How does it imply that? What do you think causes inflation if not money going into the economy?
gastationsushi@lemmy.world 5 months ago
What caused receny inflation? That is easy. It’s caused by many things including supply chain disruptions, lack of competition, war, and non-existent government oversight.
Whatever the reason, they are making more money and workers are producing more than any time in history. So back to your point, companies need an excuse for their price gouging. The money supply is their biggest scapegoat. They also blame theft and high wages. But none of those arguments hold up to scrutiny.
chicken@lemmy.dbzer0.com 5 months ago
What scrutiny? Your only criticism of the widely accepted, evidence backed idea that putting money into the economy is a cause of inflation seems to be that companies you don’t trust are supposedly saying it, but that isn’t scrutiny of the idea itself.
If you accept that markets are real, and that supply and demand works roughly the way it is understood to work by the field of economics, it should be very straightforward why adding money causes inflation; in dollar terms, it increases demand, while supply stays the same, moving the equation towards higher prices. There is disagreement about whether all forms of adding money cause inflation; I’ve heard reasonable arguments that the money supply itself is not important but rather the velocity of money and whether people who will spend it are getting it is what matters, which I’m not sure I fully agree with, but since we’re talking about government spending, that is well known to be one of the most direct forms of economic stimulus and those arguments don’t apply.