A simple explanation for your friends if they ask or if you're having trouble during an argument with liberals:
9 comments:
Anonymous
said...
Whenever people ask me why we can't just print more money, I always explain that it's for the same reason that we can't feed more people by cutting a pizza into more pieces.
We obviously CAN keep printing money forever, because the Fed DOES print trillions of dollars a year and the dollar shows no signs of collapse. Japan has been printing like crazy for 25 years now and the yen hasn't collapsed. Don't ask why, it's a complete mystery to me.
Let's chisel a new slogan onto the Eccles Building: TO ALL THE WORLD'S BANKERS, WE PAY CASH FOR YOUR TRASH.
Dave, you see a strong counter to inflation in technological improvements. For example, 10 years ago, my 50 inch plasma tv cost $2500. Today I can get a better 50" flatscreen tv for $500. When compare the real (2004) prices, my $500 TV costs about $400 in 2004 dollars.
Further, the massive injections of cash from 2007 on have mostly been sitting in banks. Will they release that money into the economy? Who knows. But it's there, like a tsunami just over the horizon.
What's the incentive of producing more mints if you don't get more dollars in return for your increased production ?
Deflation discourages production.
Increased productivity kills scarcity and disrupts the value of your production.
Producers want their product to be scarce and high value.
In fact, increased productivity is precisely why we are in the current economic crisis. It's not all the lefties, democrats, socialists, feminists, "uglies" and "fatties" fault like you claim.
Increased productivity introduces more goods in the market place which drives the price of those goods down.
Capital holders see the value of their holders diluted by the increased production and they can't make a profit anymore by producing more.
Therefore, they cut hiring and wages go down.
We are poorer precisely because we are in a world of abundance.
We need to redefine private property rights and we need alternatives to market allocation.
9 comments:
Whenever people ask me why we can't just print more money, I always explain that it's for the same reason that we can't feed more people by cutting a pizza into more pieces.
We obviously CAN keep printing money forever, because the Fed DOES print trillions of dollars a year and the dollar shows no signs of collapse. Japan has been printing like crazy for 25 years now and the yen hasn't collapsed. Don't ask why, it's a complete mystery to me.
Let's chisel a new slogan onto the Eccles Building: TO ALL THE WORLD'S BANKERS, WE PAY CASH FOR YOUR TRASH.
good stuff, cap... thanks for the easy explanation.
Dave, you see a strong counter to inflation in technological improvements. For example, 10 years ago, my 50 inch plasma tv cost $2500. Today I can get a better 50" flatscreen tv for $500. When compare the real (2004) prices, my $500 TV costs about $400 in 2004 dollars.
Further, the massive injections of cash from 2007 on have mostly been sitting in banks. Will they release that money into the economy? Who knows. But it's there, like a tsunami just over the horizon.
This is excellent, cap'n. Thank you.
~sarc~
But, if there's inflation, all we have to do is impose price controls to Whip Inflation Now! Problem solved!
~/sarc~
What's the incentive of producing more mints if you don't get more dollars in return for your increased production ?
Deflation discourages production.
Increased productivity kills scarcity and disrupts the value of your production.
Producers want their product to be scarce and high value.
In fact, increased productivity is precisely why we are in the current economic crisis. It's not all the lefties, democrats, socialists, feminists, "uglies" and "fatties" fault like you claim.
Increased productivity introduces more goods in the market place which drives the price of those goods down.
Capital holders see the value of their holders diluted by the increased production and they can't make a profit anymore by producing more.
Therefore, they cut hiring and wages go down.
We are poorer precisely because we are in a world of abundance.
We need to redefine private property rights and we need alternatives to market allocation.
Markets no longer work.
I want to print pizzas.
Excellent illustration. However, now I really want some mints.
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