Noted Economist Explains What Is Really Driving Inflation

[Fishking]

...no, what I'm doing is describing the actual processes that the federal government and Federal Reserve engaged in over the past two years.

You apparently have the US confused with Zimbabwe.

I'd also add that money which doesn't exist can't cause inflation because... it doesn't exist.


**bzzt** wrong. They're well aware that if a government actually does generate currency and uses it to purchase goods and services, that's going to cause inflation. That is exactly what happened in Zimbabwe -- and it didn't cause 6% YoY inflation, it caused 800% YoY inflation.

Keynesians are also aware that there are enormous deflationary pressures during a downturn. Thus, policies that might normally cause some inflation are actually countering the deflationary pressures.

They're also aware that the anti-Keynesians keep predicting


Such as.... the decade plus where Ron Paul predicted hyperinflation, and it didn't happen?

What did Ron Paul predict in 2002, over the next "5 to 10 years?"
An international dollar crisis will dramatically boost interest rates in the United States.

Price inflation, with a major economic downturn, will decimate U.S. Federal Government finances, with exploding deficits and uncontrolled spending.

Federal Reserve policy will continue at an expanding rate, with massive credit expansion, which will make the dollar crisis worse. Gold will be seen as an alternative to paper money as it returns to its historic role as money.

Ron Paul's Predictions - LewRockwell

Predictions by Congressman Ron Paul, MD Our government intervention in the economy and in the private affairs of citizens, and the internal affairs of foreign countries, leads to uncertainty and many unintended consequences. Here are some of the consequences about which we should be concerned. I...

www.lewrockwell.com

3 concrete predictions, all consistent with Ron Paul's views, all dead wrong. (That article, by the way, is jam-packed with failed predictions.)

Back in the real world, Krugman is generally pretty accurate -- and unlike the inflation hawks who keep getting it wrong, he actually admits it when his predictions are wrong.

That's one prediction you're trying to turn into three, and we have had inflation. Paul didn't take into account that our status in the world, and our dollar used as a global currency, keeps our dollar artificially propped up. His point would be correct outside of that variable. We'd be 100% ****ed into the ground if the world significantly moved away from trading in dollars. If we were more self contained, as Zimbabwe is, then we actually would be them.

Paul predicted the housing market crash long before others did.

Paul Krugman Admits He ‘Got Inflation Wrong’ But Stands by ‘Transitory’ Narrative

www.theepochtimes.com

Economists on the Run

Paul Krugman and other mainstream trade experts are now admitting that they were wrong about globalization: It hurt American workers far more than they thought…

foreignpolicy.com

 

[bave]

That's one prediction you're trying to turn into three, and we have had inflation. Paul didn't take into account that our status in the world, and our dollar used as a global currency, keeps our dollar artificially propped up. His point would be correct outside of that variable. We'd be 100% ****ed into the ground if the world significantly moved away from trading in dollars. If we were more self contained, as Zimbabwe is, then we actually would be them.

Not even commenting on your point of view, but I wouldn't cite Paul Krugman at this point. The man is off the rails partisan at this point and is going to twist whatever data and facts he needs to in order to reach the conclusion he has predetermined.

 

[Fishking]

Not even commenting on your point of view, but I wouldn't cite Paul Krugman at this point. The man is off the rails partisan at this point and is going to twist whatever data and facts he needs to in order to reach the conclusion he has predetermined.

I agree...I think Krugman is trash and the stuff I posted from him is even him admitting he was wrong. The other dude thinks Krugman is the bee knees. Keynesian economists are just plain nuts.

 

[Visbek]

That's one prediction you're trying to turn into three, and we have had inflation.

Nope, he made 3 discrete predictions -- none of which happened.

In the meantime, we've had mild inflation. Most of the inflation is a result of one sector -- used cars. It's not going to soar to 50% a month, and it's not going to last forever. We've already seen some inflated prices (such as lumber) drop to more normal prices over the past year.

Paul didn't take into account that our status in the world, and our dollar used as a global currency, keeps our dollar artificially propped up.

While I appreciate your attempt to spackle over Paul's obvious miss, you are incorrect. The USD's position as a reserve currency does not magically bend the law of economics to anyone's will, let alone "prop up" the dollar (whatever it is you think that means).

His point would be correct outside of that variable. We'd be 100% ****ed into the ground if the world significantly moved away from trading in dollars. If we were more self contained, as Zimbabwe is, then we actually would be them.

Nope, nope.... If the federal government printed money to pay for a massive stimulus, and there aren't any massive deflationary pressures, we'd still get hyperinflation. Being a reserve currency won't stop that.

Paul predicted the housing market crash long before others did.

lol... And a broken clock is correct twice a day.

He constantly predicts market crashes that don't happen.

2009 -- predicted a "15 year depression"

Believer in small government predicts 15-year depression

www.ft.com

2012


2013

Ron Paul Predicts "Major Crash of the Dollar" in Exclusive Interview with Birch Gold Group

Burbank, CA (PRWEB) October 18, 2013 -- Birch Gold Group is pleased to announce the release of an exclusive interview with former United States congressman and...

www.prweb.com

2014

Ron Paul: Stocks are in a bubble and will crash

Ron Paul says that conditions in the market "are every bit as bad" as they were in 2008 and 2009 and that a market crash will happen.

www.cnbc.com

2015

Ron Paul: Stock market 'day of reckoning' is near

Former Rep. Ron Paul says the Fed "cannot print money forever."

www.cnbc.com

2017

Ron Paul: Not a 'total shock' if stocks plummet 25% and gold soars 50% by October

Former presidential candidate Ron Paul has a warning for investors.

www.cnbc.com

2018

Ron Paul: A 50% correction will spark depression-like conditions that may be 'worse than 1929'

Former presidential candidate Ron Paul believes a depression-era sized pullback could happen within the next 12 months.

www.cnbc.com

Ron Paul is a crank and a gold bug. Any time he gets anything right, it's basically an accident. No one should take his claims seriously.

 

[Fishking]

Nope, he made 3 discrete predictions -- none of which happened.

In the meantime, we've had mild inflation. Most of the inflation is a result of one sector -- used cars. It's not going to soar to 50% a month, and it's not going to last forever. We've already seen some inflated prices (such as lumber) drop to more normal prices over the past year.

We've had more than mild inflation recently, mild inflation would be our standard levels. We are beyond what is standard right now. It's to the point where nearly week to week you go out to buy anything and the price is noticeably higher.

While I appreciate your attempt to spackle over Paul's obvious miss, you are incorrect. The USD's position as a reserve currency does not magically bend the law of economics to anyone's will, let alone "prop up" the dollar (whatever it is you think that means).


Nope, nope.... If the federal government printed money to pay for a massive stimulus, and there aren't any massive deflationary pressures, we'd still get hyperinflation. Being a reserve currency won't stop that.

Yes, it does. That's the ONLY thing keeping us going right now. If that was significantly moved away from we'd be ****ed.

 

[Kushinator]

We've had more than mild inflation recently, mild inflation would be our standard levels.

What's standard? Sub - 2% that's been a reality for much of the past decade? Inflation is currently higher than normal because the economy is blazing hot.

This is what a robust economic recovery looks like. Through three quarters of 2021, GDP has grown by 8%. You have to go back 37 years to see such levels of output growth.

We are beyond what is standard right now. It's to the point where nearly week to week you go out to buy anything and the price is noticeably higher.

Nonsense... 6% inflation isn't really that noticeable. It's when you're making frequent purchases of gas and durable goods that makes people notice price increases.

Yes, it does. That's the ONLY thing keeping us going right now. If that was significantly moved away from we'd be ****ed.

This is a stupid response. The whole world would be temporarily ****ed if the dollar was moved away from. You've lost the exchange and have taken on hyperbole in a last ditch effort to admit defeat.

 

[Fishking]

What's standard? Sub - 2% that's been a reality for much of the past decade? Inflation is currently higher than normal because the economy is blazing hot.

This is what a robust economic recovery looks like. Through three quarters of 2021, GDP has grown by 8%. You have to go back 37 years to see such levels of output growth.

While there is a relation between GDP and inflation, they are not the same.

Nonsense... 6% inflation isn't really that noticeable. It's when you're making frequent purchases of gas and durable goods that makes people notice price increases.

Yeah...inflation isn't noticeable so long as you're not buying stuff. That totally makes sense.

This is a stupid response. The whole world would be temporarily ****ed if the dollar was moved away from. You've lost the exchange and have taken on hyperbole in a last ditch effort to admit defeat.

No it isn't, and what the rest of the world does or doesn't do is irrelevant to the point. The point is that the U.S. economy is able to run in an unsound manner for the pure fact of our dominant position in the global economy.

 

[Kushinator]

While there is a relation between GDP and inflation, they are not the same.

You're attacking a strawman. I never claimed GDP and inflation are the same. However, it is accepted across the economic paradigm that strong economic growth comes at a cost... and that cost is inflation.

Yeah...inflation isn't noticeable so long as you're not buying stuff. That totally makes sense.

The prices for goods have increased while services (70% of the consumer budget) have grown at a normal pace.

No it isn't, and what the rest of the world does or doesn't do is irrelevant to the point.

It shows your point is meaningless. Why would the world harm itself? The dollars status as world's reserve currency is here to stay until China liberalizes.

The point is that the U.S. economy is able to run in an unsound manner for the pure fact of our dominant position in the global economy.

And your point fails to take into account why it is in a dominant position in the global economy. Your points scream desperate.

 

[Visbek]

We've had more than mild inflation recently....

As Kushinator notes, 6% YoY is definitely mild. It's half that of the 1970s.

We are beyond what is standard right now. It's to the point where nearly week to week you go out to buy anything and the price is noticeably higher.

lol... Unless you're buying a used car every single week, there is no way you're that sensitive to price changes. I buy stuff too, y'know.

I also know that people react more strongly to negative stimulus than positive -- meaning you're very likely ignoring instances where prices go are flat or fall slightly. For example, gasoline prices have fallen 6 cents per gallon in the past month. Did you notice it? Did you notice it more or less than when prices rose 6 cents a gallon?

Yes, it does. That's the ONLY thing keeping us going right now. If that was significantly moved away from we'd be ****ed.

lol

I'm sorry, but that is utterly ludicrous. You clearly have no idea what you're talking about.

Let's try some basic facts. There are a couple of ways prices can rise. One is good ol' supply and demand, which is what we're seeing now. The pandemic caused a massive supply shock (e.g. computer chip shortage, which caused a massive new car shortage), while demand shifted rapidly away from some types of consumption (bars, restaurants, concerts) and into others (home furnishings, appliances). As a result, prices rise. Needless to say, this is not affected by a nation's status as a reserve currency.

The other way is via monetary policy. M2 money supply was around $15 trillion at the start of the year. Let's say, purely hypothetically, that on any given day $2 trillion of US dollars actually getting used to buy goods and services. The rest is sitting in reserve such as savings accounts, certificates of deposits, and money market funds. If the amount of goods and services stays the same, but the federal government literally generates $2 trillion out of thin air, and uses it to give every single person an $8,000 deposit card that cannot be saved at all -- you must spend it within 30 days or you lose it -- then inflation will temporarily shoot through the roof, because you have more dollars chasing the same amount of goods.

The key here is that the increase in currency must be used directly to purchase goods and services. If the federal government conjured $2 trillion out of thin air, and gave every person an $8,000 10-year Treasury, that they could not legally transfer or otherwise spend directly, then you won't see anywhere near the same effect. Sure, some people will spend more than normal, but most of that money will be locked away, thus will not cause inflation.

And as I noted earlier: The pandemic left a huge hole in the economy. People decided to spend less on various things, and many lost work. As a result, spending declined. Normally, that would cause a deflation -- because you have fewer dollars chasing the same amount of goods. (And no, you don't want that -- deflation is much worse than inflation.) Thus, the federal government shoveling money at unemployed people and stressed-out families basically just filled part of that hole. In addition, a lot of families either put that money in the bank, or paid off debts, which again has no inflationary effect.

Needless to say, none of this is impacted by the USD's reserve currency status. That status doesn't prevent the Fed from keeping interest rates low, or borrowing extensively from domestic and foreign lenders, or increasing M2.

I will say that if the US federal government did imitate Zimbabwe, then foreign entities will move away from the USD. However, your interpretation has the causality backwards. No one is going to arbitrarily abandon the USD and, in doing so, tank the US economy. No, it's that if the US economy utterly tanks, and the government takes actions that destabilize the USD, then entities will start to abandon the USD. Get it?

 

[Fishking]

You're attacking a strawman. I never claimed GDP and inflation are the same. However, it is accepted across the economic paradigm that strong economic growth comes at a cost... and that cost is inflation.

Not a strawman. You're the one that injected it into a discussion about inflation. Further, not all GDP growth is equal. Where the GPD growth is coming from is important as well. It going up because the government artificially injected money into the system is not the same as it growing because of strong employment and wage growth. Or GDP growth because of large gains in the market made by large multinational corporations that offshore a lot of their work vs gains in smaller businesses that operate locally or nationally, which raises the economy across the country.

The prices for goods have increased while services (70% of the consumer budget) have grown at a normal pace.

Everything has gone up. I mean...should I believe you or my lying eyes when I pay for anything?

And your point fails to take into account why it is in a dominant position in the global economy. Your points scream desperate.

Lol...tell me why you think we have a dominant position in the global economy and then I'll tell you how you're wrong.

 

[Visbek]

Not a strawman. You're the one that injected it into a discussion about inflation. Further, not all GDP growth is equal.

Not all inflation is equal, either.

Where the GPD growth is coming from is important as well. It going up because the government artificially injected money into the system is not the same as it growing because of strong employment and wage growth.

Actually, it is -- when it ends up getting used to buy goods and services, and (again) just fills the hole left by an massive externality (COVID).

Plus, if government spending alone could increase GDP from 2% to 6%, then pretty much every President would be pushing for massive stimulus every single year.

Or GDP growth because of large gains in the market made by large multinational corporations that offshore a lot of their work vs gains in smaller businesses that operate locally or nationally, which raises the economy across the country.

GDP does not include increases in stock prices, and there's no indication that offshoring accelerated during the pandemic. Thank U, Next

Everything has gone up. I mean...should I believe you or my lying eyes when I pay for anything?

Your eyes are definitely lying to you.

That's why the BLS has a whole process of purchasing a consistent basket of goods in order to determine inflation.

Can you really tell us the price of a gallon of milk every year since 2010, without looking it up? Can you name, off the top of your head, the years where the price of milk fell rather than rose?

 

[Kushinator]

It going up because the government artificially injected money into the system is not the same as it growing because of strong employment and wage growth.

There is strong employment and wage growth. WTF are you on? I do find it hilarious you accidently ascribe to Keynesianism in an effort to attack Keynesianism!

Or GDP growth because of large gains in the market made by large multinational corporations that offshore a lot of their work vs gains in smaller businesses that operate locally or nationally, which raises the economy across the country.

Meaningless drivel.

Everything has gone up. I mean...should I believe you or my lying eyes when I pay for anything?

This is always the case. However, the prices for goods has increased well in excess of that for services:

Why? Because demand for goods (especially durable goods) has grown at its fastest pace on record. The Spector of a global pandemic continues to hover above society.

Lol...tell me why you think we have a dominant position in the global economy and then I'll tell you how you're wrong.

 

[Fishking]

Actually, it is -- when it ends up getting used to buy goods and services, and (again) just fills the hole left by an massive externality (COVID).

Plus, if government spending alone could increase GDP from 2% to 6%, then pretty much every President would be pushing for massive stimulus every single year.

You think GDP increasing via artificial government injection of money is the same as GDP going up due to strong market forces. OK...buh-bye.

 

[Fishking]

There is strong employment and wage growth. WTF are you on? I do find it hilarious you accidently ascribe to Keynesianism in an effort to attack Keynesianism!

Oh my...you ignorantly thing strong wage growth merely means wages going up? That's sad. Strong wage growth is when wages go up and also purchasing power increases along with it. Right now, people's wages are going up but their overall purchasing power is decreasing.

Inflation has taken away all the wage gains for workers and then some

What looked like a big jump in workers' wages during October turned into just another gut punch after accounting for inflation.

www.cnbc.com

No...explain why you think we have a dominant position in the global market.

 

[Kushinator]

Oh my...you ignorantly thing strong wage growth merely means wages going up? That's sad. Strong wage growth is when wages go up and also purchasing power increases along with it.

Again... we've seen strong wage and employment growth. Nothing you've responded with negates this fact.

What you're talking about is real wages, which are out of wack given that were still dealing with a global pandemic and supply chain issues.

Right now, people's wages are going up but their overall purchasing power is decreasing.

Inflation has taken away all the wage gains for workers and then some

What looked like a big jump in workers' wages during October turned into just another gut punch after accounting for inflation.

www.cnbc.com

That's called real wage growth. It would be a good idea to familiarize yourself with the terminology before building an argument on the basis of ignorance.

No...explain why you think we have a dominant position in the global market.

The U.S. has the strongest economy and most liquid (and largest) asset markets in the world. Combine that with the world's most powerful military and generational currant account deficits and it's easy to see why the U.S. maintains it's place as the world hegemon.

You think GDP increasing via artificial government injection of money is the same as GDP going up due to strong market forces. OK...buh-bye.

Your strawman is so weak, that you have to run away from the exchange.

The alternative (doing nothing) is and was completely unthinkable... unless you're an extreme partisan hack who is butt-hurt about election results. So you'll attack mild inflation on the back of a roaring economy and pandemic induced supply chain disruption. If the government were to sit on it's hands and try to repeat the early 1930's all over again, you'd attack the current administration for not doing enough to support the economy. And that's what you folks are... rabid partisan hacks.

 

[Fishking]

Again... we've seen strong wage and employment growth. Nothing you've responded with negates this fact.

What you're talking about is real wages, which are out of wack given that were still dealing with a global pandemic and supply chain issues.

That's called real wage growth. It would be a good idea to familiarize yourself with the terminology before building an argument on the basis of ignorance.

OK...I'll concede the improper use of the terminology, but the overall point remains.

The U.S. has the strongest economy and most liquid (and largest) asset markets in the world. Combine that with the world's most powerful military and generational currant account deficits and it's easy to see why the U.S. maintains it's place as the world hegemon.

Your little toe almost dipped into the water of the reason, which is this:

The US has it's place in the world because the rest of the developed world was bombed into oblivion and lost generations of working aged males with the one-two punch of WWI and WWII. The only "competitor" that we had was the USSR that had actually suffered the most from those wars and were a paper tiger that was set up as a real threat (this is not saying they were good guys or that nukes weren't a threat, just economically they weren't). We were literally the only show in town.

We then maintained our position with our military but, guess what? People in developed nations had babies, rebuilt, and now are advanced as well. Other economies that were underdeveloped now are now much more developed (e.g. China). We've only been slipping as time goes on, and we will continue to slip. The more we do, the less influence we have, and the more likely our economic crows will come home to roost.

 

[Kushinator]

OK...I'll concede the improper use of the terminology, but the overall point remains.

It's a cherry pick. Price indices were at suppressed levels and now they've rebounded on the back of a strong recovery in aggregate demand.

 

[Fishking]

It's a cherry pick. Price indices were at suppressed levels and now they've rebounded on the back of a strong recovery in aggregate demand.

I don't believe that has born out yet so we'll see what happens. They made claims that the inflation would be very transitory but it stuck around.

 

[Kushinator]

I don't believe that has born out yet so we'll see what happens. They made claims that the inflation would be very transitory but it stuck around.

It is transitory... but the word has been used as a means to attack this Fed and administration for political reasons.

Now the Fed will communicate what they mean on a more detailed basis.

 

[Fishking]

It is transitory... but the word has been used as a means to attack this Fed and administration for political reasons.


Now the Fed will communicate what they mean on a more detailed basis.

No...you can't pass it off as just being partisan. It's been admitted that it's lasting longer than predicted by those who claimed it would be transitory.

 

[Visbek]

You think GDP increasing via artificial government injection of money is the same as GDP going up due to strong market forces. OK...

sigh

Since you missed it: The government spending during the pandemic wasn't the federal government itself purchasing goods and services, and it wasn't thrown into low-multiplier sectors like defense. No, it was mostly given to citizens and companies, who spent it mostly on high-multiplier things like food, gas, home appliances and so on.

So, if we use the traditional formula of GDP as GDP = C + G + I + NX, then the "G" portion did not spike in 2020 or 2021. The government spending showed up primarily as C. Not G.

Given your affection for Ron Paul, it's not much of a surprise that your antipathy towards government action prevents you from understanding how this works. However, even Republican elected officials knew it. That's why they fully understood that if they hadn't taken action, then the economy would have completely tanked -- and there was no way they could allow that to happen while there was a Republican president.

 

[joko104]

The biggest culprit for rising prices that's not being talked about is the increasing economic concentration of the American economy in the hands of a relative few giant big corporations with the power to raise prices. If markets were competitive, companies would seek to keep their prices down in order to maintain customer loyalty and demand. When the prices of their supplies rose, they'd cut their profits before they raised prices to their customers, for fear that otherwise a competitor would grab those customers away.

But strange enough, this isn't happening. In fact, even in the face of supply constraints, corporations are raking in record profits. More than 80 percent of big (S&P 500) companies that have reported results this season have topped analysts' earnings forecasts, according to Refinitiv. Obviously, supply constraints have not eroded these profits. Corporations are simply passing the added costs on to their customers. Many are raising their prices even further, and pocketing even more.

How can this be? For a simple and obvious reason: Most don't have to worry about competitors grabbing their customers away. They have so much market power they can relax and continue to rake in big money. The underlying structural problem isn't that government is over-stimulating the economy. It's that big corporations are under competitive.

Noted economist explains what's 'really driving' inflation

The biggest culprit for rising prices that's not being talked about is the increasing economic concentration of the American economy in the hands of a relative few giant big corporations with the power to raise prices. If markets were competitive, companies would seek to keep their prices down...

www.rawstory.com

Well sure. Totalitarian edicts literally outlawed their competition, permanently destroying hundreds of thousands just in this country, also fabulously profitable to Big Tech via advertising income.

 

[Fishking]

sigh

Since you missed it: The government spending during the pandemic wasn't the federal government itself purchasing goods and services, and it wasn't thrown into low-multiplier sectors like defense. No, it was mostly given to citizens and companies, who spent it mostly on high-multiplier things like food, gas, home appliances and so on.

Yes...I know who did the purchasing. I'm not confusing that. It's you thinking that GDP growth from those actions is the same as an actual thriving economy. One creates more debt, the other does not.

 

[Visbek]

Yes...I know who did the purchasing. I'm not confusing that. It's you thinking that GDP growth from those actions is the same as an actual thriving economy. One creates more debt, the other does not.

lol

Yeah, that's not so clear-cut.

First of all, in case you missed it: Both individuals and corporations alike routinely use debt to purchase goods and services. In fact, the private debt-to-GDP ratio has been well over 200% since 2004, and was around 238% in 2020. In contrast, the public debt-to-GDP ratio is much lower at 128%.

Second, the federal government's borrowing of debt during a downturn is exactly what it should do. Since you seem to need a primer....

During a downturn, people lose their jobs, income falls, spending falls. Those who still have jobs generally hunker down, reduce spending, save up money, and sometimes pay down debt. Corporations do similar things -- they reduce staff, reduce spending, reduce inventory, and stockpile cash. Banks also are discouraged from lending, because they know not every borrower will be able to pay their loans during the downturn. While this is rational on the individual level, it's a disaster on the national level, because it exacerbates the downturn.

So, what the government does is borrow some of the cash that is sitting in banks and doing nothing. They get it circulating in the economy again. This gets people back to work, which helps keep businesses going. In addition, lowering interest rates makes it cheaper for banks to lend. It won't completely end the downturn, but it will blunt and shorten it.

That was Keynes' insight, and there is no question that it worked during the pandemic. Almost every metric and economic indicator, except inflation and consumer confidence, has vastly improved or gotten back to normal since last spring. Unemployment rates have fallen every single month since May 2020, and we're now back to full employment (5% U3). Wages are up, manufacturing output is back to normal, consumer spending is up, retail spending is up, the quits rate is up (indicating that people are confident they can get better jobs), initial job loss claims are back to normal, exports are way up, even the trade deficit -- Trump's bete noir -- has fallen since he left office.

As to the debt component? I've heard people whine about federal debt for literally decades, and the promised horrors simply never happen. In fact, those deficit hawks were rather conveniently silent when it was a Republican President -- Reagan, Bush 41, Bush 43 and Trump who sent deficits soaring to the skies. Meanwhile, we're borrowing at 5% below the inflation rate. If you want to identify things that aren't comparable, look no further than household and public debt. Those are two completely different animals.

I will say that a poorly designed stimulus won't help much -- but in that case, it won't boost GDP much either. E.g. if the federal government spends an additional $1 trillion on defense spending, then GDP will rise by a little more than $1 trillion. But when it mails out $1 trillion directly to unemployed citizens, then GDP will rise by far more -- because of the multiplier effects.

So... In terms of what matters to GDP, there is no problem with a government stimulus program, as long as it is reasonably well designed, and actually does the job.

 

[Fishking]

lol

Yeah, that's not so clear-cut.

First of all, in case you missed it: Both individuals and corporations alike routinely use debt to purchase goods and services. In fact, the private debt-to-GDP ratio has been well over 200% since 2004, and was around 238% in 2020. In contrast, the public debt-to-GDP ratio is much lower at 128%.

That actually pay for it whereas the government not only does not, but literally cannot. We could not pay a single penny beyond our interest from actual money. We're actually paying our interest on our debt with more debt.

If you can't figure out how ****ed that is, there's no helping you.