Mhykiel! Glad to see you here buddy. Wanted to send you an invite but you had been AWOL on DDO for a while before the spampocalypse. I hope we will be seeing your logically deft post here. The site greatly needs posters like you.
I think if that was done, the cost of milk would hit 20 dollars. And gas 100 a gallon.
I think that is the intuitive reaction, but though some prices might rise, they will not rise as high, and would quickly stabilize.
The ability to buy goods would create shortages and price would adjust accordingly.
True, but the added assets would allow supply to quickly ramp up to meet the increased demand. The higher the demand, the greater will be the incentive to increase supply.
There is a reason poverty exists, and I doubt it has much to income.
Again, I agree. As I said earlier, despite the title of the thread, this is not an exercise to cure poverty. Rather, it is an experiment to show people that inflation exists only in their minds.
I used to teach a class where in one exercise, I press a penny into the forehead of a volunteer and ask him to contort his face till the penny falls off. What he doesn't know is that I did not leave the penny on his face, but pretended I had. The pressure sensors in his forehead though tell him the penny is there.
Pressing the penny into his skin made him feel as if the penny was still there even after it had been removed by me. So the subject would stand before the class, hands cupped under his head, contorting his face thinking the penny was there, to the howls of laughter of the people watching him contort his face.
Then, before he suspected the truth and touched his face, I would hold up a mirror before him. Seeing the penny not there, he would immediately stop contorting his face.
But then the crux. Everyone, and I mean everyone, I did this test on, would touch their face even after seeing in the mirror that there was no penny there.
Why? Because they were getting conflicting sensory information. The penny felt as if it was there, but did not look as if it was there. The hand to touch forehead could not have been predicted. The subject is actually trying to break the tie between to conflicting senses (pressure/sight) with touch. He is not even aware this is what is happening.
By keeping the IOU system separate from the money system, I could hold up a mirror to the population showing them that the inflation pressure they feel on their foreheads, cannot be seen with their eyes.
And like all subjects, and this is critical, they will lift up a hand to touch where their pressure sensor is telling them inflation is. After this, they begin to ignore the information coming from their pressure sensor.
In this state, the normal human reactions and responses in economic theory no longer hold. People act differently.