Comment by wakawaka28
2 months ago
Price stability is overrated. Prices must change according to scarcity. Letting the government print money any time prices start to fall is literally letting the government profit off your back. It makes accounting easier, but it destroys market information like "Supply of goods is catching up to demand, find something better to produce".
> Price stability is overrated.
Tell that to Biden/Harris. Dissatisfaction about prices helped get Trump elected (and now is causing him troubles with popularity as well).
> Letting the government print money any time prices start to fall is literally letting the government profit off your back.
The vast, vast majority of money that is "printed" is created by private banks through credit creation:
* https://www.bankofengland.co.uk/explainers/how-is-money-crea...
* https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1905625
And the money supply that is created by government(-ish) institutions is by central banks, which—in modern times—are generally operated independently from the government (except in, e.g., Turkey; and some folks want less independence). Central banks often work in opposition to what politicians want: just ask Powell.
You are preaching to the choir, for the most part. People just got brainwashed into expecting prices to be "stable" but what is really happening is the price of money is being manipulated for various reasons.
Credit is a very thorny issue. Politicians and banks have promised people impossibly good and contradictory outcomes.
>And the money supply that is created by government(-ish) institutions is by central banks, which—in modern times—are generally operated independently from the government
In all cases the independence is an illusion. Conflicts over policy are manufactured to make the government appear more frugal than it is. Every fiat currency ever has gone to zero.