How to fix the economy

this could be one of those bell curve memes where the low end and high end are the moron/jedi guys saying “just print more money” and the middle of curve has a freshman Econ student trying to explain macroeconomics.

To be fair, Economics is half imagination and magic. It’s why something like bitcoin could even become a thing.

Printing more money and using it for public works or giving it directly to the poor could be a valid form of wealth redistribution that doesn't require collecting taxes. The problem of course is capital, it's immune to this kind of inflation, though rich people who have their wealth in debt would be hurt.

Currency divides the value of an economy. It can only represent that total value.

... but printing more would fix problems if all the new stuff went to normal people. It would give them a larger share of their economy's total value, at the expense of billionaires. The usual trouble is that those rich fucks also get all the new money, doubling down on how they have all of the fucking money.

She's not totally wrong

If we gave every American 1 billion dollars the current billionaires would lose massive amounts of power and it would help fix wealth inequality.

All government spending is done by "printing money", at least in monetary sovereign countries like the US, UK, and other countries issuing their own cureencies. The government is the monopoly issuer of the currency and cannot run out of it, just like the scorekeeper of a baseball match cannot run out of points. Taxes are also not for funding the government, but for removing momey from circulation, precisely to curb inflation. (Also to drive the value of the currency by making people demand it to be able to pay their taxes). Thus "printing money" isn't in itself inflationary, as long as the newly created money is spent on something where there is excess production capacity. The question for the government is never "can we afford it", but rather "are the real resources there to achieve it".

It's not particularly difficult to fix the economy.

Make a law. This law will require the head of the IRS go to the richest person in the country, and give them the option of writing a check large enough that they are knocked out of the top 1%, or playing a round of Russian Roulette.

Repeat every month, and the problems of wealth disparity will be solved in about a year.

So here is how it works (in the USA):

Prices of goods on a market are set by Supply:Demand Equilibrium

If a business knows they can charge more for a good or service and still sell enough to get more profit than selling them all quickly and cheaply, then they have to calculate what to sell at to optimize profits.

You can chart out the supply and the demand as a function of price with inverse correlation at varying strengths, *implying that supply will change to meet market demand so long as enough capable workforce exists to accomplish it.

Now apply this concept to Money.

If Money is plentiful and people are more willing to spend money on goods and services, then the providers of those goods and services will raise the prices to maximize the gains. In this example the regulatory bodies might use Bonds to reclaim and retire money and/or use a variety of techniques targeting loan interest rates in various ways to limit the *creation of money.

If Money is Scarce, then the prices will lower until they reach a threshold at which A) it cannot be produced for cheaper or B) somebody somewhere needs it and therefor will pay the price no matter how comparatively steep. Since these two scenarios are generally quite bad in the context of unnecessary human suffering, unprofitable goods and service industries generally receive subsidies so that regulatory bodies can keep a steady calculated amount of necessary supplies available to citizens far into the future, examples give: food, medicine, hygiene, or housing.

This also has an effect on exchange rates for trade partners. You can set a price on money. If your money is more valuable than another country's money as a result of their willingness to purchase that money as an investment, then it makes sense to trade and buy up their cheap goods. The USA's financial system is built around this concept of lending to struggling economies and providing data-heavy telecommunications services, built on the back of their decades of leading the pack for telecommunications technology and their leadership roles in many trade organizations including World Bank headquartered in Washington DC. Basically, the value of USD is dependent on investors in the EU and China owning US Treasury Bonds.

So it becomes obvious to most of us that creation of money can oftentimes be beneficial, but it also devalues savings and bonds, so it's often thought a delicate balance is needed to maintain value.

• *implying - it's not always true that supply reflects demand in the same way that demand relies on supply, many modern economic theories revolve around the idea that Supply has much more power and therefor regulatory actions which focus on supply are more effective fiscal policies.
• *creation of money - Loans create money. If you lend 100 dollars at 5% interest then you get back 105 dollars. While the debt is yet to be repaid, that 5 dollars exists. Debts can be traded as well. At first it doesn't seem like it would add up to much, but in fact Bonds act as Debts and also large Loans are very very very common for the USA, and this all sort of stacks year after year until it's reached the current point where the majority of USD is non-M1 M2 which is to say money that doesn't physically exist: digital money and promissory notes.

Theres a lot more but I can't be asked to teach economics.

The problem here is that a government does not in fact have the ability to decide how much their currency is valued, they can only indirectly influence it. When they try to pretend like it's just a "rule" they can set like "here is the mandated exchange rate, we'll put you in jail if you make trades at any other price" is when things get real stupid.

Have you peeps never heard of modern monetary theory (mmt)? Macroeconomics is not so simple! Most people talking about have the knowledge of a minor in business econ though

I do sometimes wonder if you could technically still run a working government off printing money, just recognizing that doing so didnt create more value, but instead acted as a form of taxation. Imagine a government that currently holds no significant fraction of its currency. It then prints an amount equal to what is currently in circulation, doubling the money supply and in doing so presumably halving the value of a given unit of that currency. Once it has done so, no new value is created, but that government has gone from having no significant fraction of the money in circulation, to having half of it, which it can now spend.

Suppose you did this predictably, you let everyone know that you will be increasing the money supply by x percent every year, and will be re-denominating it to avoid difficult to work with numbers at set intervals. Wouldnt you technically have a functioning system for extracting value from the economy to pay for government functions?

It might not be a very good system, since all it would effectively tax is people's savings of currency and not stuff like property, and you would have to set up things like employment contracts or debts to compensate for constant high inflation rates, but Im not sure I see a reason why it technically couldn't be done.

You laugh, but this actually kinda worked for 1980s Brazil.

https://www.npr.org/transcripts/1115430369

This is literally how monet works though. It's made up.

Well, who ever created money can just uncreate it and we end capitalism, eat the rich and have a better planet

Let’s see

Zimbabwean one hundred trillion dollar note

Hyperinflation in the Weimar Republic

The WORST Inflation in History | Tales From the Bottle

Any more examples?

Imagine there's a new issue of a famous comic book being printed (the series doesn't matter; take your pick). But the caveat is that there's only going to be ONE copy printed. Only one in existence. That single issue could potentially be worth millions, because it's so desirable for comic book nerds and they all want to get their hands on it. Only the wealthiest of collectors will be able to throw enough money at it to win an auction, which raises its value significantly.

Now imagine the publisher decides to make 100 copies instead. The value of that issue is now much cheaper; maybe worth several thousand dollars per comic, because there are a handful of them floating around now. Still, only wealthy collectors will be able to afford bidding on a copy, but at least the top 100 bids will win a copy. Raising the value, but not as much as if they are all bidding on a single product.

Now imagine 100,000 copies are made. Now it's mostly a standard printing, and it's only worth the cover price for a comic nowadays (what, like $3.99 or so?)

The more copies that are out there, the easier it is to find and acquire, and thus the cheaper its value is. Same goes for money; the more printed bills that are out there, the less value each bill has, and you'll need more of them to afford basic products. Which is why inflation is a thing, because we're constantly printing more money each year.

In reference to my point about comic book values, there are only about 100 copies left in existence of the first Superman comic (Action Comic #1). A single copy sold last year for $6 million, and its condition was only rated 8.5/10, which means it's a little rough around the edges from wear and tear. Not even a pristine comic book, and it still cost millions to buy!

That same issue sold for 10 cents when it was first made in 1938, but the fact that comics were made to be read and then discarded back then means most people never held on to their comic books and their numbers have dwindled over the years. Now Superman is a huge deal - one of the best-selling comics of all time - and his first appearance in a comic book is so rare, people will spend millions just to have an original copy.

are we still in the "the state should just go further into debt to pay for infrastructure" or already in the "fuck, that was a big mistake, what do we do with all that debt now?" stage? i can't tell anymore.