Inflation here? gas/grocery prices just continue to climb (4 Viewers)

I think it's odd that people find inflation to be some mysterious economic force. I'm not accusing anyone in particular, but I've found that to be a general sentiment among the average layman.

Inflation is an increase in the supply of money -- sure there are other factors but this is the overwhelming contributor. It often goes by the name of "stimulus." Economics 101 doesn't even teach this very basic fact, which tells you something about economic "science".

Prices go higher when there is more money inserted in the economy, which happened. It's kinda a duh thing. It's the price of temporary relief. It's unlikely the long term costs are worth it. The economy never should have been shut down.
 
I think it's odd that people find inflation to be some mysterious economic force. I'm not accusing anyone in particular, but I've found that to be a general sentiment among the average layman.

Inflation is an increase in the supply of money -- sure there are other factors but this is the overwhelming contributor. It often goes by the name of "stimulus." Economics 101 doesn't even teach this very basic fact, which tells you something about economic "science".

Prices go higher when there is more money inserted in the economy, which happened. It's kinda a duh thing. It's the price of temporary relief. It's unlikely the long term costs are worth it. The economy never should have been shut down.
So in times of disaster/crisis, govt can put harsh penalties on price gouging
Couldn’t they also do that with ‘stimulus’ money?
Like if they were legit trying to help out regular folk
It’s a legit question
 
My civics class was taught by the men’s tennis coach :hihi:
My Economics/Free Enterprise teacher was an ex football coach.
First day of class, he told about the essay due at the end of the semester and it was worth 80% of our grade. So guess what, i got like an 85% in his class. I never did homework, most of the time i didn't even bother taking the tests..I am sure i wasn't the only one who saw the flaw in his grading model...lol

But i will say i had a great Civics teacher. I liked her so much, for 2 of my electives, i took her history classes
 
So in times of disaster/crisis, govt can put harsh penalties on price gouging
Couldn’t they also do that with ‘stimulus’ money?
Like if they were legit trying to help out regular folk
It’s a legit question
I'm not quite clear on what you mean. Are you suggesting putting restrictions on stimulus money? If so, yes, that would be good from the perspective of keeping prices lower. The government is doing the stimulus though, so they would simply need to not do the stimulus.
 
But if you shut down the economy you kinda have to help people, so it's a quandary. The economy should not have been shut down in my view. That would be the solution.

Inflation is the price of the stimulus. Everyone is paying for the stimulus but of course it hurts poor people most. And it helped them the most too.
 
Regular people must be punished for getting money by prices going up?
No I don't think so. I think it's wrong. Actually I think it's massively wrong. It is the most destructive part of economic management and it benefits the wealthy. Wealthy people can usually ride the inflation because their money is in stocks which ride up with the increase in prices generally.
 
Or an increase in demand for products. Or a reduction in supply of products.
I mean our American economy, the worldwide economy too. We have inflation as a rule. It's massively wild that people think it's ok. In a free economy prices would always be going down because production almost always becomes more efficient across time. It's the opposite of economy as far as economy means efficiency. It's truly illogical. It's the reason wealth accumulates to so few people. It's theft in my opinion through manipulation of money.
 
Or an increase in demand for products. Or a reduction in supply of products.
Agreed. We are still suffering the effects of covid. We are slowly coming out of . Supply currently can't keep up with demand.
 
I mean our American economy, the worldwide economy too. We have inflation as a rule. It's massively wild that people think it's ok. In a free economy prices would always be going down because production almost always becomes more efficient across time. It's the opposite of economy as far as economy means efficiency. It's truly illogical. It's the reason wealth accumulates to so few people. It's theft in my opinion through manipulation of money.
I think it's worth knowing why inflation is generally preferred to deflation, which is what you're suggesting.

https://www.thebalance.com/why-is-inflation-good-4065995 said:
Inflation is good when it is mild. There are two situations where this occurs. The first is when inflation makes consumers expect prices to continue rising. When prices are going up, people want to buy now rather than pay more later. This increases demand in the short term. As a result, stores sell more and factories produce more now. They are more likely to hire new workers to meet demand. It creates a virtuous cycle, boosting economic growth.


The second is when it removes the risk of deflation. That’s when prices fall. When that happens, people wait to see if prices will drop more before buying. It cuts back demand, and businesses reduce their inventory. As a result, factories produce less and lay off workers. Unemployment rises, leading to wage deflation. Workers have less money to spend, which reduces demand even more. Businesses lower their prices. That makes deflation worse. For this reason, deflation is even more corrosive to economic growth than inflation. Prices fell 10% during the worldwide Great Depression.

Inflation causes people to buy now, rather than wait. Deflation causes people to wait instead of buying. One of those grows the economy. The other slows the economy. Both create cycles. Growing the economy is obviously the preferred cycle.
 
I think it's worth knowing why inflation is generally preferred to deflation, which is what you're suggesting.



Inflation causes people to buy now, rather than wait. Deflation causes people to wait instead of buying. One of those grows the economy. The other slows the economy. Both create cycles. Growing the economy is obviously the preferred cycle.
I'll bow to your knowledge on this issue. One thing I did learn a long time ago is deflation is far worse than inflation.

 
I think it's worth knowing why inflation is generally preferred to deflation, which is what you're suggesting.



Inflation causes people to buy now, rather than wait. Deflation causes people to wait instead of buying. One of those grows the economy. The other slows the economy. Both create cycles. Growing the economy is obviously the preferred cycle.
Yes I know this is the general high time preference attitude. I think it's wrong. It discourages saving. Lower prices would be a boon for the economy. Don't you think you'd buy more if prices were lower? The idea that rising prices actually makes the economy better is bizarre. They teach that in most academic settings. I get it, I was taught that in school too and it's not correct. Not that there are no economists who are pro-deflation, there are. There's a whole large group of them, and it makes far more sense than the mainstream. It takes some wild mental gymnastics to try to convince people that higher prices are better.
 
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