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User Info: Jacehan

Jacehan
1 month ago#1
Okay, so, especially in a time where, like, 40% of people are unemployed, the idea of just giving people money is more popular than ever. The question often goes "Where does the money come from?" and there is talk about taxes and borrowing and such. But why don't we just print more money?

"But inflation!"

Yes, there will be inflation, but consider this example.

You have a society with 100 people. 99 of them have $1000 to their name, while the last person has $901,000. So you would say that 90% of the wealth was owned by 1% of the people, and there is a total of $1,000,000 "circulating" (although that one person probably isn't spending).

Now say the government of this society decides to print a new $1,000,000 and distribute it equally amongst the people. The 99 people now have $11,000 in wealth, and the 1% has $911,000. The top 1% now owns about 45.5% of the wealth - without having to tax them at all.

Now say there is inflation because we double the amount of money in circulation. Maybe all prices double, or triple, or even quintuple! But the people are 11x better off than they were before, so even a ten-fold increase in prices would still leave them better of than they were.
"To truly live, one must first be born." ~ Evan [aX]
Paper Mario Social:
The Safe Haven of GameFAQs. (Board 2000083)

User Info: willis5225

willis5225
1 month ago#2
The snag (as came up in the other topic sort of on the subject!) is that the initial $901,000 isn't in circulation as liquid currency, but is largely held in investment vehicles. That's affecting the price of food, heating, housing, etc., in an indirect way whereas doubling the money supply (and I'm sure Kodi will tell me that I'm using this wrong, and I await his correction) will inflate the value of money at a higher rate than its proportion to the total available wealth.
Willis, it seems like every other time you post, I need to look up a word that's in the OED or Urban Dictionary but not both.
-Mimir

User Info: Jacehan

Jacehan
1 month ago#3
Sure, but I'm positing that inflation could be quite high and 99% of the people would still be better off. Yes, the 1% would be much worse off - but I don't care about that.
"To truly live, one must first be born." ~ Evan [aX]
Paper Mario Social:
The Safe Haven of GameFAQs. (Board 2000083)

User Info: willis5225

willis5225
1 month ago#4
Hm I guess I was considering this within the context of the wage economy--that a farmer growing a bushel of wheat for $5 that by the time it is processed is worth $500 still only has $5--which is not valid in a UBI context.
Willis, it seems like every other time you post, I need to look up a word that's in the OED or Urban Dictionary but not both.
-Mimir

User Info: Jacehan

Jacehan
1 month ago#5
Yeah, also, the main reason inflation is "bad" is that is decrease the real value of savings, therefore "punishing" people who did the "right" thing. But considering most people don't have savings and rich people are hoarding wealth dragon-style, decreasing the relative value of those hoards (while simultaneously increasing the savings of people who don't have money) is good. Yeah, if we just had inflation without the payments, that would be bad.

A while bad Arthur Chu had a thread about bimetalism in the US and William Jenning Bryan's famous Cross of Gold speech, which is essentially arguing for inflation to increase prosperity.
"To truly live, one must first be born." ~ Evan [aX]
Paper Mario Social:
The Safe Haven of GameFAQs. (Board 2000083)

User Info: Kodiologist

Kodiologist
1 month ago#6
willis5225 posted...
and I'm sure Kodi will tell me that I'm using this wrong, and I await his correction

Nah, I don't actually know anything about economics. I've done "behavioral economics", but really that's just a newfangled term for the experimental psychology of decision-making. Anyway, economists have a tense relationship with empirical methods and are irrationally committed to the idea that people are rational, so I suspect the best empirical work on economic matters is actually done by sociologists.
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