prices go up?
Why.
Help.
Why is government printing more money and giving it to me a bad thing. I need it to live.
I’d like both the econ101 (fake, lib, propaganda) and the marxist (real, truth, based) answer pls.
I’ve never thought of money like that. That’s interesting.
But why would prices double, if, say, the govt. gave everyone double the money they have, wouldn’t people just buy more stuff? And if there isn’t anymore stuff to buy (and it’ll take some time to make), then the money would just…be there? Right? You don’t spend it till you have something to spend it on?
But there isn’t any more stuff to buy, it is exactly where demand side kicks in. Say you have excess money and previously couldn’t buy, idk, ducati bike. Well now you and millions of people can buy it. Ducati will be like “omg, we can’t produce this shit this fast, but we can raise prices to a level where what we produce will be sold” (see gpus in pandemic). So prices immediately will rise across the economy. In actuality, some goods with flat demand (like necessities bread and stuff) won’t rise due to doubling of money that much, but rare stuff will more than double.
On average everything will double, but it will differ product by product.
With savings it’s why I included “closed system”. Yeah, some money will go to savings (again, as in covid), and will slowly bleed out back into economy. Some will be spent in financial gambling, inflating prices there.
Ok, so it’s the companies that choose to increase prices to make more money. They can keep selling the bike for $100,000 but they choose to sell it at $300,000.
But that doesn’t have to happen. If the govt. said “no, you can’t just increase the price”, then the bikes would sell at $100,000 via like a first come first serve or a random lottery or whatever.
And for essentials you can just divide the stuff like bread among everyone to ensure no one starves or dies.
Like, that would just be a fairer way to do things.
But, if I’m understand your point of money as measurement, that would mean you get $100,000 times the number of bikes sold as the “economy number” instead of $300,000 times that, which is bad)
Well, it’s what ussr did, goods were cheap, but for some of them you have to wait in a sort of a queue (I think they sold cars this way), maybe yugoslavia as well (?).
For economy number, it’s kinda meaningless thing in itself (it is why people talk about inflation-adjusted gdp, you can double gdp easy peasy otherwise).
Opposition to inflation is mainly in debt holders (banks/other states), and porkies aren’t too thrilled with it, but only if it’s accompanied by worker discontent, otherwise they also ironically benefit from inflation.
There is also kind of uncontrolled mass psychology, that if inflation happens too rapidly, it can topple the government real fast, even if people can still eat. It introduces uncertainty of what your own holdings in bank are worth, so you transfer them into something tangible (gold/beans/collectibles), so amount of money increases further than government expects, because people “don’t trust the money”
