Inflation Rearing its Ugly Head

[Logophile]

When the dollar loses its reserve status because the major corporations of the world no longer borrow in it.

The dollar has value because everybody pays their debt in dollars. Nobody borrows bonds in bitcoin. The United States also lets people come in and use their dollars to get services an asset in United States. It’s very rare that a country will let you come in and buy property in their country.

I understand and way back, it got Japanese investors in a lot of trouble. Regardless, borrowing during a pandemic is pretty nuts. The only upside is that it's not 3 trillion instead of 2. Thanks!!

 

[MTAtech]

I understand and way back, it got Japanese investors in a lot of trouble. Regardless, borrowing during a pandemic is pretty nuts. The only upside is that it's not 3 trillion instead of 2. Thanks!!

Why exactly is borrowing during a pandemic "pretty nuts?"

 

[Visbek]

Yes, Read the whole thing twice. But your entire message is about an economy that we definitely don't want. Your challenge to me why why Japan could borrow like mad with a huge deficit and still not experience inflation. Well, almost 50 percent of Japan's whopping debt has been foisted off on the Bank of Japan. Households only hold 1.3 percent of that debt. So, all it really means is that the bank is in the hot seat, not the government.

lol

As you yourself quoted, the Bank of Japan isn't an independent entity or private bank. It's the central bank of Japan. It's the same as the Federal Reserve in the US. You can't buy shares or open an account at the BoJ.

Further, that leaves 55% of Japan's massive debt somewhere other than the BoJ. Why doesn't that 55% cause inflation?

Oh, wait, I know. It's because private lending doesn't cause inflation.

Oh, and guess what? The US federal debt went from $23 trillion to $28 trillion during the pandemic; the federal debt held by the Federal Reserve banks rose from $2.4 trillion to $5.6 trillion. This, of course, undermines your attempts to blame borrowing for inflation. Whoops.

Also, according to your theory, all that has to happen is the Fed has to buy more federal debt, and inflation won't be a problem. Right?

To boot, the Bank of Japan keeps Japan afloat by then loaning the government money at ridiculously low or negative interest rates.. Essentially, Japan's economy is predicated on a house of cards.

lol, no. They just have more debt.

The whole economy is artificially propped up. And with an aging population and a mountain of debt, if it experiences another ripple in its GDP, it will be in back to Japan and bad debt.

lol... What does "bad debt" mean, exactly? Japan has never defaulted. And again... government debt isn't the cause of their primary economic issue. The problem is that their population is shrinking.

Would you put your money in the Bank of Japan right now?? I sure wouldn't.

Dude.

If I told you that cars don't need spark plugs, would you take anything I say about auto engines seriously?

 

[Visbek]

Yes, but we've borrowing trillions for years. When is it going to end?

Never.

In fact, the global economy would tank if the US federal government stopped borrowing.

I suggest you get used to it.

For example, we're in the middle of a pandemic. There are a multitude of problems on the horizon -that we can literally see - that could influence our economy. Now is not the time to take on more debt.

Nope, wrong. This is exactly the time to borrow, because the pandemic put a gigantic hole in the economy last year, and we're still trying to fill it in.

The wrong time to borrow was between 2016 and 2019. The economy was going great, revenues were up, we had the option to curtail a little spending here and there (especially in defense). Instead of reducing the deficit, Trump gave huge and pointless tax cuts to corporations and the wealthy. It did nothing for the economy, and increased our debts.

Now is the time to address the most pressing problem, that of a pandemic, and solve it before we overreach.

How, exactly, are we supposed to deal with the pandemic, and the massive holes it's putting in the economy, without federal spending?

 

[highroller]

I understand and way back, it got Japanese investors in a lot of trouble. Regardless, borrowing during a pandemic is pretty nuts. The only upside is that it's not 3 trillion instead of 2. Thanks!!

Borrowing during a pandemic is nuts?!? Do you know what’s nuts? Borrowing trillions to cut taxes during “boom times” in 2017.

We could’ve been using the additional revenue to pay back prior debts incurred, but we didn’t do that; we just cut taxes and borrowed more money.

Borrowing during a pandemic is the right move just like borrowing during times of war is the right move. Real war, not Afghanistan or Iraq.

 

[Logophile]

How, exactly, are we supposed to deal with the pandemic, and the massive holes it's putting in the economy, without federal spending?

By spending ON the pandemic, not tking on more

lol

As you yourself quoted, the Bank of Japan isn't an independent entity or private bank. It's the central bank of Japan. It's the same as the Federal Reserve in the US. You can't buy shares or open an account at the BoJ.

Further, that leaves 55% of Japan's massive debt somewhere other than the BoJ. Why doesn't that 55% cause inflation?

Oh, wait, I know. It's because private lending doesn't cause inflation.

Oh, and guess what? The US federal debt went from $23 trillion to $28 trillion during the pandemic; the federal debt held by the Federal Reserve banks rose from $2.4 trillion to $5.6 trillion. This, of course, undermines your attempts to blame borrowing for inflation. Whoops.

Also, according to your theory, all that has to happen is the Fed has to buy more federal debt, and inflation won't be a problem. Right?


lol, no. They just have more debt.


lol... What does "bad debt" mean, exactly? Japan has never defaulted. And again... government debt isn't the cause of their primary economic issue. The problem is that their population is shrinking.


Dude.

If I told you that cars don't need spark plugs, would you take anything I say about auto engines seriously?

Did you read the link?? Yes it IS a private entity.

lol

As you yourself quoted, the Bank of Japan isn't an independent entity or private bank. It's the central bank of Japan. It's the same as the Federal Reserve in the US. You can't buy shares or open an account at the BoJ.

Further, that leaves 55% of Japan's massive debt somewhere other than the BoJ. Why doesn't that 55% cause inflation?

Oh, wait, I know. It's because private lending doesn't cause inflation.

Oh, and guess what? The US federal debt went from $23 trillion to $28 trillion during the pandemic; the federal debt held by the Federal Reserve banks rose from $2.4 trillion to $5.6 trillion. This, of course, undermines your attempts to blame borrowing for inflation. Whoops.

Also, according to your theory, all that has to happen is the Fed has to buy more federal debt, and inflation won't be a problem. Right?


lol, no. They just have more debt.


lol... What does "bad debt" mean, exactly? Japan has never defaulted. And again... government debt isn't the cause of their primary economic issue. The problem is that their population is shrinking.


Dude.

If I told you that cars don't need spark plugs, would you take anything I say about auto engines seriously?

Would you want your money with the Bank of Japan?? That's the question that you did not answer, but that's the fundamental question about any financial institution. If you were Japanese, would you have faith in its financial health?? Because essentially, it's holding massive debt. The 50 percent that whatever other entities hold - if that was all that was held - may be manageable, not great but manageable. And private lending doesn't cause problems until what?? There are defaults. Then what happens?? And please don't tell me that Japan hasn't seen its share of bad debt. And the "shrinking" population has little to do with why its Keynesian efforts have been backfiring with high debt and rolling deflation. Keynesian remedies are not meant to be long term monetary policy. The Japanese have tried to employ it long term and it's not viable. Now it's just smoke and mirrors, all artificial props. That's why you haven't seen inflation in Japan. Thanks!!

 

[iguanaman]

I don't "whine." That verb is a used as a condescending tactic but has no validity in an adult debate, and you only betray yourself when you employ it. The reason why corporate taxes were cut was in part to encourage American businesses to reestablish in America, which obviously provide American jobs, not to mention a reduction in the trade deficit. But it would take more than tax incentives to bring American factories home. Never did not I advocate a raise in spending. Until the early days of covid, I saw little reason for an increase in the national debt. Thanks!!

LOL More lies to justify cutting corporations taxes when their effective taxes where already lower than the worlds average. The tax cuts (and the one term mistakes failed trade war) resulted in record high trade deficits and putting our manufacturing sector in recession.

America’s trade gap soared under Trump, final figures show​

The U.S. trade deficit over the four years of President Donald Trump’s presidency soared to its highest level since 2008, despite his tough tariff tactics intended to bring it down, a new Commerce Department report showed on Friday.
The combined U.S. goods and services trade deficit increased to $679 billion in 2020, compared to $481 billion in 2016, the year before Trump took office. The trade deficit in goods alone hit $916 billion, a record high and an increase of about 21 percent from 2016.

 

[Visbek]

By spending ON the pandemic, not tking on more

No, dude.

When the pandemic first hit, everything shut down, and tons of people lost or quit their jobs. GDP and spending plummeted. Unemployment insurance and the stimulus checks helped fill the hole created by the pandemic.

Without that spending, the US would have had a protracted depression.

Did you read the link?? Yes it IS a private entity.

lol... Yes, it is "private" in the same sense that the Federal Reserve Bank is "private."

The BoJ is not a commercial bank, it's not an investment bank, it's a central bank. You're just utterly and completely clueless about how central banks operate and are structured.

The 50 percent that whatever other entities hold - if that was all that was held - may be manageable, not great but manageable.

lol

Yes, other people and institutions hold the rest of the debt. That's how it works.

Japan's debt-to-GDP ratio is 266%. The US is at 107%. What you classify as "manageable" is significantly larger than the US's current debts which... again... aren't causing inflation.

And private lending doesn't cause problems until what?? There are defaults. Then what happens?

Good grief.

Neither the US or Japan have defaulted. Neither the US or Japan are likely to default any time soon. Defaults cause recessions -- but those nations usually climb out of those downturns fairly quickly. More importantly, no one fears that Japan or the US will default; if they did, then interest rates on their government bonds would rise. Thus, even the fear of a far-off default is not causing current inflation.

And please don't tell me that Japan hasn't seen its share of bad debt.

I want you to explain exactly what you mean by "bad debt."

And the "shrinking" population has little to do with why its Keynesian efforts have been backfiring with high debt and rolling deflation.

Yes. It does.

Japan's population is, in fact, shrinking. It peaked in 2010 at 128 million, and has fallen to 126 million. The marriage rate is falling, birth rates are falling, the population is aging. A big reason why they keep doing these stimulus actions is because they don't want to deal with GDP drops that are in line with the changes in their population.

And again, nothing you've said makes any sense for your theory. If you were right, then all that borrowing should cause massive inflation and multiple defaults. Neither of those are happening, or likely to happen any time soon.

The bottom line is that your ideology is completely divorced from reality.

 

[Logophile]

No, dude.

When the pandemic first hit, everything shut down, and tons of people lost or quit their jobs. GDP and spending plummeted. Unemployment insurance and the stimulus checks helped fill the hole created by the pandemic.

Without that spending, the US would have had a protracted depression.


lol... Yes, it is "private" in the same sense that the Federal Reserve Bank is "private."

The BoJ is not a commercial bank, it's not an investment bank, it's a central bank. You're just utterly and completely clueless about how central banks operate and are structured.


lol

Yes, other people and institutions hold the rest of the debt. That's how it works.

Japan's debt-to-GDP ratio is 266%. The US is at 107%. What you classify as "manageable" is significantly larger than the US's current debts which... again... aren't causing inflation.


Good grief.

Neither the US or Japan have defaulted. Neither the US or Japan are likely to default any time soon. Defaults cause recessions -- but those nations usually climb out of those downturns fairly quickly. More importantly, no one fears that Japan or the US will default; if they did, then interest rates on their government bonds would rise. Thus, even the fear of a far-off default is not causing current inflation.


I want you to explain exactly what you mean by "bad debt."


Yes. It does.

Japan's population is, in fact, shrinking. It peaked in 2010 at 128 million, and has fallen to 126 million. The marriage rate is falling, birth rates are falling, the population is aging. A big reason why they keep doing these stimulus actions is because they don't want to deal with GDP drops that are in line with the changes in their population.

And again, nothing you've said makes any sense for your theory. If you were right, then all that borrowing should cause massive inflation and multiple defaults. Neither of those are happening, or likely to happen any time soon.

The bottom line is that your ideology is completely divorced from reality.

Actually, the bottom line is you don't read. I said plainly and clearly to spend on the pandemic and nothing more, and you argued it as if I said the opposite. I never SAID that Japan or the US have defaulted so can stop arguing with yourself by attributing your words to me. Though your faith in government management is truly admirable, interest rates should be hiked. They are not for because of unsound economic policy. I'm well aware of Japan's elderly population, but your premise is flawed. Japan's problem is Keynesian which has produced deflationary cycles. Japan's output should easily accommodate the aging population, particularly because of its hallmark automation, And if you don't know about Japan's bad debt, I don't know what to say. Maybe you're a whole lot younger than I imagined. Thanks!!

 

[Visbek]

Actually, the bottom line is you don't read. I said plainly and clearly to spend on the pandemic and nothing more, and you argued it as if I said the opposite.

Yeah, here's the thing. Almost all we've done for the past 18 months is spend on the pandemic, yet here you are blaming inflation on... government spending and debt.

So, are you now saying that spending massive sums, and racking up trillions more in debt, is perfectly OK -- as long as it's on stimulus spending and unemployment insurance?

I never SAID that Japan or the US have defaulted so can stop arguing with yourself by attributing your words to me.

Sigh.... You brought up "bad debts," and started ranting about defaults. But again, the inflation you're terrified of happened without any defaults, and again there is no reason to believe that either Japan or the US lack funds to meet their debt obligations. So, you STILL need to clarify what you mean by "bad debts," and how that is relevant to inflation.

And if you're just going to say "default bad thing, debt bad thing!!!" then I'm going to point out... again... that defaults hurt, but rarely topple nations. The country has a recession, borrowing gets more expensive, and in a few years creditors go right back to lending to the country.

Though your faith in government management is truly admirable, interest rates should be hiked. They are not for because of unsound economic policy.

Oh, really? So in your "expert" opinion, what America needs right now is another recession? Brilliant plan.

I'm well aware of Japan's elderly population, but your premise is flawed. Japan's problem is Keynesian which has produced deflationary cycles. Japan's output should easily accommodate the aging population, particularly because of its hallmark automation.

Well, you apparently aren't aware of Japan's falling population, which actually explains why their economy is shrinking. Yet again! The government interventions are intended to combat inflation, it's just not enough.

And no, automation isn't enough either. The problem is that Japan is losing consumers, and the consumers it has are avid savers. They aren't spending enough to get GDP into positive territory. They're bailing out a sinking ship with a thimble.

And if you don't know about Japan's bad debt, I don't know what to say.

What you can do is actually back up your assertions, and specifically identify what you're talking about. What a concept.

 

[bave]

Yeah, here's the thing. Almost all we've done for the past 18 months is spend on the pandemic, yet here you are blaming inflation on... government spending and debt.

I think the issue is that a lot of the government stimulus was unnecessary, the last round of stimulus checks was a great example. Bonus unemployment etc. This all showed up in consumer consumption and household savings being some of the highest in history in 2020/21. This of course led to inflation for a variety of factors.

I would simply point out that at some point we can't rely on QE and deficit spending to continue to propel an economy, at some point the drug fueled party has to end.

 

[Visbek]

I think the issue is that a lot of the government stimulus was unnecessary, the last round of stimulus checks was a great example. Bonus unemployment etc. This all showed up in consumer consumption and household savings being some of the highest in history in 2020/21. This of course led to inflation for a variety of factors.

I hate to break this to you, but... Your hatred for helping people is leading you to incorrect conclusions.

To start with, the root cause is the supply chain problems caused by the pandemic. For example, the lack of chips meant that new car production fell, which in turn causes used car prices to soar. In addition, the total number of cars sold fell in 2020, quite a bit. I.e. few people decided to get a car specifically because they got a $1400 stimulus check.

This should be screamingly obvious based on the specificity of what is driving price increases right now (e.g. used cars make up something like 30% of the CPI's increases); and how prices are impacted globally, not just in the US, even though different nations are obviously using different strategies.


As to the savings rate? Surprise! A lot of that was the wealthy stockpiling their cash. 80% of the excess savings during the pandemic were held by the top 20% of earners; 46% were saved by the top 1% alone. Keep in mind that in normal years, the bottom 60% has almost no savings, they spend almost everything they earn. That's one reason why (in pre-pandemic era) half of American households have less than 3 months of emergency savings.

Unemployment insurance just filled some of the hole created by the pandemic. Remember, UI normally pays about half of your take-home (and is taxable). If you earn $60k/yr, then the $600 bonus basically matched your full salary; if you earned less, you got a nice bonus; if you earned more, then you received less than your normal pay. The stimulus checks had income limits ($75k individuals, $150 joint). And the last one, a whopping $1400, was sent out in the spring.

We can see the impact of the stimulus checks on the savings rate -- it lasts about 1 month. The PSR peaked at 34% in April, which was when everyone hit the breaks, the first checks went out, and UI shot up. By June, it was down to 19%, and has been on a downward trend ever since. The 2nd and 3rd checks bumped up PSR for a month each, after which PSR continued to decline. It's now only 2% above pre-pandemic levels. (See chart below)

Further, an increase in household savings doesn't cause inflation; that makes no sense whatsoever. If the money isn't chasing goods, then it isn't driving up prices. If you are saving your money, or buying stocks, or buying Bitcoin, the prices of those goods may soar, but it isn't included in the CPIX.

And of course, PSR and inflation are poorly correlated. See chart below.

So much for that theory.

If you still somehow ignore all the facts, and insist that PSR and stimulus somehow causes inflation, then I've got some good news for you: We should be in the clear! PSR is mostly back to normal. UI bonuses are over. The chances of another stimulus check are slim.

So, will you regale us with a prediction for when inflation will return to normal? Shouldn't it be any day now?

 

[Kushinator]

Would you put your money in the Bank of Japan right now?? I sure wouldn't.

What a weird thing to say... Why would you put "money" in the bank of Japan? Well, if you're going to be traveling to Japan, you'll essentially be putting "money" in the bank of Japan, as central banks tend to sweep all forex outside of notes and coins.

Nevertheless, you continue to miss the mark by a very wide distance, and have difficulty reading for comprehension.

 

[Kushinator]

If I told you that cars don't need spark plugs, would you take anything I say about auto engines seriously?

He's basically claiming his car runs on water....

 

[Kushinator]

Would you want your money with the Bank of Japan??

I get that many people are not well versed in these subjects, and can use this forum as a way to learn... but what you're doing is the exact opposite. You don't have the slightest clue, and when someone interacts with you, the tone eventually becomes condescending because you're acting like you know everything. It's painfully obvious you are absolutely clueless.

So why don't you want to learn about these topics given the amount of time you spend arguing about these topics? Instead, you just dive deeper into ignorance driven by an insatiable need to confirm your bias.

 

[Visbek]

What a weird thing to say... Why would you put "money" in the bank of Japan?

He thinks that the Bank of Japan is a commercial bank.

I don't think he knows the difference between a commercial and central bank.

 

[Logophile]

Yeah, here's the thing. Almost all we've done for the past 18 months is spend on the pandemic, yet here you are blaming inflation on... government spending and debt.

So, are you now saying that spending massive sums, and racking up trillions more in debt, is perfectly OK -- as long as it's on stimulus spending and unemployment insurance?


Sigh.... You brought up "bad debts," and started ranting about defaults. But again, the inflation you're terrified of happened without any defaults, and again there is no reason to believe that either Japan or the US lack funds to meet their debt obligations. So, you STILL need to clarify what you mean by "bad debts," and how that is relevant to inflation.

And if you're just going to say "default bad thing, debt bad thing!!!" then I'm going to point out... again... that defaults hurt, but rarely topple nations. The country has a recession, borrowing gets more expensive, and in a few years creditors go right back to lending to the country.


Oh, really? So in your "expert" opinion, what America needs right now is another recession? Brilliant plan.


Well, you apparently aren't aware of Japan's falling population, which actually explains why their economy is shrinking. Yet again! The government interventions are intended to combat inflation, it's just not enough.

And no, automation isn't enough either. The problem is that Japan is losing consumers, and the consumers it has are avid savers. They aren't spending enough to get GDP into positive territory. They're bailing out a sinking ship with a thimble.


What you can do is actually back up your assertions, and specifically identify what you're talking about. What a concept.

To your first point, spending ON the pandemic is not what we are about to do. And unfortunately, it wasn't what we did. Mailing checks and paying people to sit home seemed okay for a while, but then Biden decided that maybe he should extend the whole business, which made a lot of people think it was a way of life. Now, they kinda like it. A ton of them moved back in with the folks, and the folks are now having a hard time getting them back out. It's infinitely more fun to sit home playing video games and checking Tinder. The same is true of living off a spouse. And by the way, my definition of spending on the pandemic means spending on SOLUTIONS and a broad range of solutions, not just vaccines. Making work places safer is a better solution than what we have now, which is people who don't want to work.

Japan's bad debt: https://www.wsj.com/articles/SB942178695816093864 This link is less informative but doesn't have a pay wall: https://academiccommons.columbia.edu/doi/10.7916/D8TM7JM1
If you subscribe to the Times: https://www.nytimes.com/1998/07/30/...an-s-banks-now-estimated-near-1-trillion.html
Okay?? As you pointed out, defaults are not good, and they're REALLY not good if major economies do it at the same time, which is what we're risking with the US borrowing more and raising the debt load along with lots of other nations' excessively borrowing. That's not rocket science.

Japan's shrinking population is shrinking national consumers, but that's not a bad thing. It's potentially a good thing because those products - in a global economy - should be sold all around the world and raising the ratio of exports to imports. And frankly, Japan doesn't need any more people, and neither does the rest of the world. We've overpopulated, but that's a different discussion.

We will not go into a recession if we don't spend on a porky "infrastructure" package. That's all pie in the sky. Thanks!!

 

[Kushinator]

It's infinitely more fun to sit home playing video games and checking Tinder.

The same is true of living off a spouse.

Is that infinitely more fun than working???


Maybe your work sucks....

my definition of spending on the pandemic means spending on SOLUTIONS and a broad range of solutions, not just vaccines.

Not even an attempt to explain one solution in your entire response.

Japan's shrinking population is shrinking national consumers, but that's not a bad thing.

Of course it is! A stagnating / declining population is a tremendous headwind facing any economy. The economy grows in three ways: by population, productivity, and / or inflation.

It's potentially a good thing because those products - in a global economy - should be sold all around the world and raising the ratio of exports to imports.

And frankly, Japan doesn't need any more people, and neither does the rest of the world. We've overpopulated, but that's a different discussion.

Wow. There literally are no words that can describe such idiocy....

We will not go into a recession if we don't spend on a porky "infrastructure" package. That's all pie in the sky. Thanks!!

Complete and utter nonsense.

If consumption and investment fall off a cliff, we are going into recession no matter how much is "spent" by the government because it can never replace the falling aggregates fast enough. If consumption and investment decline by $3.5 trillion, what do you think happens to output?

 

[ElChupacabra]

Is that infinitely more fun than working???


Maybe your work sucks....

Not even an attempt to explain one solution in your entire response.

Of course it is! A stagnating / declining population is a tremendous headwind facing any economy. The economy grows in three ways: by population, productivity, and / or inflation.


Wow. There literally are no words that can describe such idiocy....

Complete and utter nonsense.

If consumption and investment fall off a cliff, we are going into recession no matter how much is "spent" by the government because it can never replace the falling aggregates fast enough. If consumption and investment decline by $3.5 trillion, what do you think happens to output?

It's gotten to the point where Japan had to change its immigration policy in order to deal with the impacts of a population decline and what that means to certain parts of their labor force.

 

[Visbek]

To your first point, spending ON the pandemic is not what we are about to do.

The impetus is to continue filling the holes. When people lose their jobs, they stop spending. That causes a recession, which causes more job losses. That's the cycle we needed to prevent.

More to the point, though, is that the spending you blame for inflation hasn't happened yet, but you're still blaming it for inflation. WTF.

Mailing checks and paying people to sit home seemed okay for a while, but then Biden decided that maybe he should extend the whole business, which made a lot of people think it was a way of life.

Hello? The current inflation started in June 2020. You're blaming Biden for last year's inflation? Which was caused by supply chain issues, not monetary policy? WTF.

Now, they kinda like it. A ton of them moved back in with the folks....

Adults living with their parents doesn't cause inflation.

And they don't like it. The problem is that they can't afford to move out.

It's infinitely more fun to sit home playing video games and checking Tinder.

Well, it definitely beats getting screamed at by frustrated assholes for $8/hour.

More to the point, though, is that playing video games, or taking care of your child instead of working for low pay, doesn't cause inflation.

And by the way, my definition of spending on the pandemic means spending on SOLUTIONS and a broad range of solutions, not just vaccines.

I thought that's what you meant. That's why I needed to remind you that when millions of people are laid off, they stop spending, and that causes a recession and DEflation. That's why providing stimulus checks and unemployment insurance just fills the hole left by the reaction to the pandemic.

Japan's bad debt

So you're going back to 1998, to look at CORPORATE debts, to attack the utility of GOVERNMENT debts? Just stop.

As you pointed out, defaults are not good, and they're REALLY not good if major economies do it at the same time, which is what we're risking with the US borrowing more and raising the debt load along with lots of other nations' excessively borrowing. That's not rocket science.

You know what also isn't rocket science? Realizing that the US government is nowhere even remotely close to defaulting.

Japan's shrinking population is shrinking national consumers, but that's not a bad thing.

It is, if your goal is to increase Japan's GDP.

It's potentially a good thing because those products - in a global economy - should be sold all around the world and raising the ratio of exports to imports.

Good grief.

Japan already has a positive balance of trade. That hasn't stopped deflation, and it hasn't pushed GDP growth rates consistently into positive territory.

Further, dedicating more capacity to exports doesn't actually make those exports cheaper or more enticing. You know what would make Japan's exports more desirable, and imports less desirable? Of course you don't know. It's inflation. By reducing the purchasing power of the yen, other nations can buy more Japanese goods (because it's cheaper than before), and imports get more expensive.

That's why many times, when a nation's economy has a downturn, the central bank -- like, y'know, the Bank of Japan -- will lower interest rates. That encourages lending, which puts money into the economy, and counteracts the deflationary pressures.

And frankly, Japan doesn't need any more people, and neither does the rest of the world. We've overpopulated, but that's a different discussion.

It is. However, your utter ignorance of the ways that population decline impact GDP growth rates and currency valuations are quite relevant.

We will not go into a recession if we don't spend on a porky "infrastructure" package. That's all pie in the sky.

That's not why we should spend on infrastructure.

We should spend on infrastructure because it is badly needed, and we've been underfunding it for decades. Now is the time to do it, because it is still insanely cheap to borrow, and it will enhance future productivity, and because we need it. Even Republicans know we need to spend big on infrastructure -- they just don't want Democrats to get any credit for it.

 

[Kushinator]

It's gotten to the point where Japan had to change its immigration policy in order to deal with the impacts of a population decline and what that means to certain parts of their labor force.

Absolutely. What is most unfortunate is the structural challenge with respect to sexism in the work environment. Immigration will help, and on the equality front as well IMO.

 

[LittleTayuya]

Foolish fools you have all failed there never was inflation and taxes on the poor havn't gone up it's all a test by the great God AOC. The great god appears amused this time so there shall be no punishment or perhaps there will be... the great God works in bizarre undiscernible ways either way many of you should expect to be visited by members of her chosen people in the coming days for a surprise or something she's really being super vauge on this one. Tax the Trump! Lets Go Brandon!

 

[Good4Nothin]

You seem to forget the FED who is monitoring the inflation situation and can raise rates if they find it a problem. Rates are currently at historical lows and there is plenty of room for the Fed to increase rates if it is needed. You also forget that some inflation is healthy for the economy and we have had deflation due to covid which is very bad for the economy.

If inflation is allowed to get out of control the Fed can't control it by raising interest rates. And the Fed will let inflation get out of control, because it doesn't want to raise interest now, because that is bad for the stock market.

The Fed will wait until nothing can be done, and then say it did all it could. And we'll have a different Fed chair. And the rich will be fine, while the general public starts living in tents.