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@Greyparrot
Yes. Debt is not correlated with inflation
Trump urges GOP to let catastrophic debt default happen if Dems don’t accept cuts
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@sadolite
Because the two issues are not correlated with each other. They are independent of each other
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@Vegasgiants
That's not what I said lol.
I laid out how the increasing National Debt indirectly caused a rise in Inflation, and in the next post, I explained how the Fed raised rates to counter the inflation caused by the borrow/spend policies.
More specifically, I explained how the recent policy change to increase Fed rates countered presumption number 2.
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@Greyparrot
Inflation came from covid spending this time. Our economy is cyclical. Recessions and inflation are a normal part of it
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@Vegasgiants
This is how the game is played. It's called negotiationDo you honestly not know how this works?
That’s the problem. Joe Biden refuses to negotiate
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@ILikePie5
My god you have to be kidding. Lol
Trump would “negotiate so people are happy”
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@Vegasgiants
Yes. Debt is not correlated with inflation
Do you think that printing worthless money is not correlated with inflation?
Because you have printed worthless money and you have had inflation.
Unless you deny that you have had inflation?
Of course, if production of goods increases equally with an increase of money in circulation, then prices stay somewhat same.
However, what we have is that production increased greatly, but also did prices. This means that printing of money exceeded the increase in production of goods.
When production increases, prices are supposed to decrease, not increase.
Of course, while money is simply valued as ratio of amount of money and amount of goods, the problem is that value of money decreased when it was supposed to increase with the increase in the amount of goods.
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@Best.Korea
So was this the cause of inflation in the 1970s?
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@Vegasgiants
The inflation is usually caused by:
1) Decrease in product supply
2) Increase in money supply
Or both of these 2.
The other causes of inflation include: high taxes or lack of competition.
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@Best.Korea
So not the debt.
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@Vegasgiants
My god you have to be kidding. Lol
We’ll see who’s kidding when the GOP gets spending cuts :)
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@Vegasgiants
Debt = increase in money supply
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@Best.Korea
And yet we have had debt for decades
We continue to take on debt and inflation decreases
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@Vegasgiants
And you had inflation for decades.
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@ILikePie5
You must be young and have never go thru this before
I've gone thru it 70 times
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@Vegasgiants
We continue to take on debt and inflation decreases
Inflation decreased? No. Its higher than it was in 2017 and 2018.
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@Vegasgiants
You must be young and have never go thru this beforeI've gone thru it 70 times
Waiting till the last minute to agree to spending cuts? Couldn’t be me
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@ILikePie5
Well....that's because you are not in power. Lol
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@Best.Korea
Inflation hasn't decreased this year even while debt increases?
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@Best.Korea
2%. Sounds good to me
I don't know why poor people (making less than $150,000 a year) even want to live.
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@Vegasgiants
5% from what I read.
Also,
Constant inflation is a constant increase in prices. Therefore, if inflation remains at 5%, that means prices will keep increasing by 5% again and again.
Yearly inflation of 5 % means that prices increase by 25% in 5 years, and 50 % in 10 years.
If you have 2 dollars, and print 2 more, you will have 4 dollars and the inflation will be 100%. However, if you dont print any more after that but keep it at 4 dollars, inflation will be 0.
If you constantly increase money supply by 5% per year, inflation will constantly be 5% per year. That means in 50 years, prices increase by 250%. This is assuming everything else remains same.
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@Best.Korea
It's 4.9%...you are WILDLY EXAGGERATING!
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@Greyparrot
My bad.
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@Best.Korea
Name a country that never has inflation
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@Vegasgiants
Over the past several decades, countries like Switzerland, Japan, and Germany have generally had low and stable inflation rates.
From 2011-2021, the average annual inflation rate in the United States was around 1.8%, while in Switzerland it was around 0.5%, in Japan it was around 0.3%, and in Germany it was around 1.2%.
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@Greyparrot
So have we. Very low inflation until recently
All of those countries have debt
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@Vegasgiants
Those countries have far better monetary policies. None of them sat on a zero percent fed rate for a decade like we did.
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@Greyparrot
Well all of them benefit from the umbrella of freedom we provide
Aircraft carriers are not cheap