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"...And MTG threw a tantrum on the way out. Win-win"
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this post was submitted on 30 Sep 2023
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I got a degree in economics. I'm not going to watch up trash on YouTube. If you can't condense it and make a point it is obviously meaningless.
The government buys things with US dollars, if it uses huge huge amounts of US dollars to buy things you get inflation. It's a basic premise..
Just look at Germany pre ww2 or look at Zimbabwe after it stopped being Rhodesia.
neither of those governments had monetary sovereignty. Zimbabwe was also an exceedingly rare case of hyperinflation within a country using fiat currency.
Edit: please, engage with the source material. What about monetary sovereignty is incorrect?
YouTube isnt a source.
If what you are claiming is true that the government has unlimited real money this means three things. 1 any government could make as much real money as they like and massively improve the livelihoods of all citizens but choose not to. There is a guaranteed Nobel prize in economics and probably physics. Someone somewhere is hiding a huge conspiracy for whatever reason.
That at a minimum requires a paper on the topic. A YouTube video isn't up to that standard.
The claim you are making is extraordinary. I'm not going to watch 1.5 hour worth of YouTube to prove you wrong just as I wouldn't for a flat earther.
It really is up to you to explain this world changing information succinctly and coherently. To at least raise the topic. What you are saying is all the governments and universities are wrong here is a a load of YouTube videos. Not worth my time sorry.
Fine, let me grab you some of the sources used in one of these highly researched videos.
Books:
Articles:
Looks like you have a lot of reading to do. If only there were an easily digestible way to consume all of this information in a way that only had the relevant parts for our discussion.
Article by Forbes.
Yes inflation erodes money. Yes nothing in that article proves what you are saying or has anything I disagree with.
If the government starts buying more stuff it will cause demand-pull inflation. That goes against what you say.
Article on zimbabwe
"Further, the response of the government to buy political favours by increasing its net spending without adding to productive capacity was always going to generate inflation and then hyperinflation."
That goes against what you say. They increasing spending (looks like they were going for infinite money cheat) that didn't work. Therefore that also proves the point I am making you cant just spend spend spend and the world will be perfect.
Third article. I would copy and past but I can't. 3 The MMT perspective .
Just read that. Government spending caused inflation. Therefore they don't have unlimited money they destroyed their economy overbuying.
Take a step back. I have looked at your sources and they go against what you are saying. You need to reanalyse your views and see if they are right or if you just want them to be right.
I have responded to what you have stated so now it's your turn to answer the questions without YouTube or books or articles. Just answer.
The question is this how does the US government have infinite money?
How does the government buying huge amounts not cause hyperinflation and therefore stop them buying everything?
How does the government print money without it causing inflation?
Just to be clear I understand government deficit and a government running a deficit is not an example of governments having unlimited spending power. It's spending now and paying for it later. This differs from personal spending in the fact that humans have to pay off their loans in their lifetime, the government does not. So don't use that as an explanation for the above points as it is invalid.
Do just like to be an insufferable dickhead, or is this you being serious? Congrats, you learned what hyperbole means. Fiat currency is limited by the real economy. In the US, the real economy is trillions of dollars more than the federal budget. You'd know that if you watched those videos. The deficit is a myth, and the only real spending limit is the resources available to the government.
I'm an insufferable dickhead because I took your sources and proved you wrong?
I already know that, I have a degree in the subject.
That's why most people talk about real money which is not unlimited.
I lashed out in frustration with an insult, which wasn't appropriate. I'm sorry. I was frustrated with how my use of "infinite money" was taken literally, when you as an economist would know that nothing regarding the economy could be infinite. I'm still a bit irritated that your entire disagreement is based on pendantry.
"infinite money" was obviously hyperbole, for the record. They tried to make it seem like it wasn't obvious, but if they really couldn't tell then they were being oblivious.
How do you mean it then? Because it's not clear at all.
The government obviously print money in a form that is sort of as a tax on everyone. Inflation is independently set from the government at something like 2% so the government makes money when the bank print enough to ensure that inflation remains at 2%. But that's independent if the government so the government absolutely does not have infinite money. They have 2%.
It used to be more but that was seen to be detrimental to the economy and the government, so 1-2% is where most countries set it.
The government absolutely has to manage how it spends money and it can only spend what the economy can absorb which isn't much.
So maybe it is up to you to explain. Because you seemed to make out that the government can just choose to spend a lot more money with 0 negative consequences. Also for some reason even though the government is able to do this, they don't.
Both points need explaining.
This entire thing relies on the federal government having the ability to print money that is not backed by a commodity, and does not owe a significant amount of debt to another country. Taxes on the federal level literally don't fund anything (note that this is not true of local or state taxes). They exist solely to drive demand for the currency. Instead, the upper limit to government spending is the amount of resources and labor available to the government, which is several trillions of dollars worth more than the federal budget. This is what's known as the real economy. A single trillion is incomprehensible, hence why I called it "infinite money".
The value of money is determined by market forces and international trade and exchange.
The only efficient way to get anything out of the economy for the government to use is though taxes.
Taxes do fund things. The government has to manage its money it can't just spend needlessly.
Let's say taxes do nothing for government spending? Why do it? To drive demand for the currency? What does that even mean. Why is that a good things for the government to create fake demand for the currency? There is already real demand there because people need it to by something.
So why doesn't the government get several trillions more worth of dollars resources and labour then? It can do so much more. (How would this not have a catastrophic effect on the economy).
It's absolutely not infinite money. If you struggle to think of money in that high of numbers think about it as a percentage of the economy. The government can only use a percentage of that economy it can't take and take and take without reducing the rest of the economy. Different countries have different percentages and that has pros and cons.
But it's not unlimited. It's a percentage of the economy. Could the us tax it's people as much as Sweden or Denmark? Yes . But that's not unlimited that's just different ways of governance. You're original point is losing all meaning. The government cannot spend needlessly without negative impacts which is what you were implying.
My country has higher taxes than the US and I like that, but it's a choice. Our wages are lower because of it but we get free healthcare. Doesn't mean our government has unlimited money because I get taxes more, it just means I have less.
Do you know what a fiat currency even is? It seems like your mind is still stuck in the gold standard. I'm not going to get into your pendantic bullshit again.
Yes it's driven by market forces.
You know the feds job is to control the flow of money right? Independent of the government.
They will put the country into a recession before inflation gets out of hand. That's how important the control of currency is, it's the main job.
It seems like you don't understand how fiat currency has its value or who controls it.
The German government in the early '20s engineered their hyperinflation as part of an attempt to demonstrate an inability to pay the ruinous war reparations demanded by the Versailles Treaty. It's really not a good example of "natural" inflation.
As someone who is not informed on this and just is going by what is written in this thread, the videos seemed high quality and informative, and you saying "I got a degree" and refusing to engage because you don't like YouTube is absolutely unhelpful and uninformative.
It seems like @rockSlayer@lemmy.world is right, based on the information available right here. If you really disagree and would like like to show otherwise, please do engage and provide more information, I find this interesting.
The economics major has a point actually, but it's nowhere near as interesting or important a point as they think.
Actually it just seems like the economics major is rude and doesn't know what hyperbole is.
That's literally what he did in the first comment you replied to.
He posted the sources to back up his point because you were disputing it, and then you said "you don't have a point!" Ridiculous.
He talked about fiat money being unlimited but it isn't unlimited.
Fiat money is a type of currency that is not backed by a commodity, such as gold or silver. It is typically designated by the issuing government to be legal tender.
In no way did he explain why fiat money is unlimited money. That's the bit that needs explaining.
If you flood the economy with money that money becomes less valuable (inflation) and therefore you need more money to buy things. At no point does that mean you can buy unlimited goods, it just means you can print worthless paper.
So yea I need to know what evidence I'm disputing to dispute something. It's not up to me to disprove an argument that hasn't even been explained.
He didn't say that it wouldn't affect inflation. He didn't say it's value doesn't go down by printing more. He simply said it's possible to print an unlimited amount (I assume barring a shortage of paper or ink or labor), and that remains true.
On the other hand, he's now apparently changed his mind. It would seem he did indeed mean to imply more than just his words.
"infinite" is hyperbole. In this context, it means "more than enough".
It should be obvious, "infinite" can never apply to real world situations like this.
Classic economics major, though.
Yep. "I know better, so just shut up!"
He'll make a typical politician one day.
People just don't seem to understand the supply-and-demand aspect of inflation, which is what causes these braindead takes; nor do these YouTube videos bother explaining it.
It's madness.
They get a viewpoint and then just agree with everything that everyone remotely says close to it without judging it.
Then to win an argument you spam a huge amount of information that doesn't prove the point in question but all does need to be disproved or they are magically right.
I just hope some people reading comments and not replying at least gain some knowledge of the system they are using.
I mean, when your worldview is challenged then you only have two options:
a) Concede, learn, move on
b) Stand your ground, no matter what
The former is hard, so people pick the latter. It's that simple.
Also, there's a form of comfort to be found in burying your head in the sand and pretending that simple solutions exist to complex problems. It requires less critical thinking and gives you hope that someday, somebody will say they've 'had enough' and solve problems like world hunger or poverty in one fell swoop. It's a lot more difficult to admit that, in reality, money is inherently worthless and the labor and resources that give it value are usually finite quantities.
Well, that or they just think economic problems are super easy to fix because their only source is a poorly-sourced YouTube video.