Total Posts:12|Showing Posts:1-12
Jump to topic:

Create more money

GMZ2
Posts: 9
Add as Friend
Challenge to a Debate
Send a Message
12/31/2015 7:46:45 PM
Posted: 11 months ago
I know what you're going to say: "UUUUHH, MUH INFLAYSHONNZ!!1!!1"

But why? money is an abstract concept, like the boogeyman, so let's just disregard it entirely and make the world rich again (clear up the debt to start with.) Or maybe just abolish money, I don't know.

Bring it on, autists.
bballcrook21
Posts: 4,468
Add as Friend
Challenge to a Debate
Send a Message
12/31/2015 8:27:16 PM
Posted: 11 months ago
At 12/31/2015 7:46:45 PM, GMZ2 wrote:
I know what you're going to say: "UUUUHH, MUH INFLAYSHONNZ!!1!!1"

But why? money is an abstract concept, like the boogeyman, so let's just disregard it entirely and make the world rich again (clear up the debt to start with.) Or maybe just abolish money, I don't know.

Bring it on, autists.

Germany tried doing that and it brought them into Hyper Inflation in the 1920s. Not a good idea.
If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand. - Friedman

Underlying most arguments against the free market is a lack of belief in freedom itself. -Friedman

Nothing is so permanent as a temporary government program. - Friedman

Society will never be free until the last Democrat is strangled with the entrails of the last Communist.
ClaesTheilgaard
Posts: 9
Add as Friend
Challenge to a Debate
Send a Message
1/3/2016 10:32:11 AM
Posted: 11 months ago
At 12/31/2015 8:27:16 PM, bballcrook21 wrote:
At 12/31/2015 7:46:45 PM, GMZ2 wrote:
I know what you're going to say: "UUUUHH, MUH INFLAYSHONNZ!!1!!1"

But why? money is an abstract concept, like the boogeyman, so let's just disregard it entirely and make the world rich again (clear up the debt to start with.) Or maybe just abolish money, I don't know.

Bring it on, autists.


Are you a troll?

If you print more cash, the value of each dollar bill decreases - the currency decreases overall, at least if you print enough. All history shows that this is the case. You can however, still do it to some degree under clever supervision and control. But you cannot just clear all debt in the world by printing money. This would create a level of hyperinflation the world has yet to see.

It is, at its most basic, all about the fundamental idea of supply and demand. If you increase the supply of cash rapidly, the demand stays the same. After all, it is not like people got wealthier in the country where you start printing cash. We live in a globalized economy. All that happened is that they got more dollar bills. But all of these dollar bills are now worth less for each one.

It is logical that the value of each dollar bill must decrease. Twice as many dollars in an economy makes those dollars worth half as much.
16kadams
Posts: 10,497
Add as Friend
Challenge to a Debate
Send a Message
1/4/2016 6:28:50 PM
Posted: 11 months ago
At 1/3/2016 10:32:11 AM, ClaesTheilgaard wrote:
At 12/31/2015 8:27:16 PM, bballcrook21 wrote:
At 12/31/2015 7:46:45 PM, GMZ2 wrote:
I know what you're going to say: "UUUUHH, MUH INFLAYSHONNZ!!1!!1"

But why? money is an abstract concept, like the boogeyman, so let's just disregard it entirely and make the world rich again (clear up the debt to start with.) Or maybe just abolish money, I don't know.

Bring it on, autists.


Are you a troll?

If you print more cash, the value of each dollar bill decreases - the currency decreases overall, at least if you print enough. All history shows that this is the case. You can however, still do it to some degree under clever supervision and control. But you cannot just clear all debt in the world by printing money. This would create a level of hyperinflation the world has yet to see.

It is, at its most basic, all about the fundamental idea of supply and demand. If you increase the supply of cash rapidly, the demand stays the same. After all, it is not like people got wealthier in the country where you start printing cash. We live in a globalized economy. All that happened is that they got more dollar bills. But all of these dollar bills are now worth less for each one.

It is logical that the value of each dollar bill must decrease. Twice as many dollars in an economy makes those dollars worth half as much.


Ceteris paribus, yes. But if you increase the money supply as the economy grows, you don't get inflation. Most economists favor expanding the money supply as the economy grows.

But low levels of inflation are not bad (whereas hyperinflation is). If inflation increases, while the worth of each dollar falls, wages correspondingly increase. This means the net-effect is essentially zero. But I tend to favor NGDP targeting over what we have now. It would be a better indicator of when we need monetary expansion and when we need contraction. Even the libertarian Mercatus Center agrees (http://mercatus.org...).
https://www.youtube.com...
https://rekonomics.wordpress.com...
"A trend is a trend, but the question is, will it bend? Will it alter its course through some unforeseen force and come to a premature end?" -- Alec Cairncross
ResponsiblyIrresponsible
Posts: 12,398
Add as Friend
Challenge to a Debate
Send a Message
1/8/2016 11:22:37 PM
Posted: 11 months ago
At 1/3/2016 10:32:11 AM, ClaesTheilgaard wrote:
If you print more cash, the value of each dollar bill decreases - the currency decreases overall, at least if you print enough.

Total and complete nonsense, at least in the short run (which we're perpetually trapped in). There is no clear link between the quantity and the so-called "value" of money--the dollar's exchange rate is set by global policy divergence, expectations of growth and geopolitical stability abroad, etc., and some of that might be *influenced* by the quantity of money insofar as the central bank isn't a credible inflation (or deflation) fighter, but there has not, and will not, be a case of confidence crises whereby investors march out of the dollar because we "printed too much money"; in fact, the dollar at the moment has been on the rise, despite the fact that the Fed expanded the monetary base fourfold. Any references to Zimbabwe or Weimar Republic, as the poster above you made, are likewise irrelevant, because the U.S. issues its own currency.

As for the link between the money supply and inflation--or the "value" of the dollar, which is linked to inflation but by no means the best indicator of it--here it is:

MV = PY

where M is the money supply, V is velocity, and P and Y are prices and real output, respectively. Velocity is an increasing function of the nominal interest rate in the short run (but is fixed in the long run), and because that's been near zero for almost seven years (until recently), velocity also fell precipitously.

But there's even another link at play--that between the monetary base and the money supply: the base has increased by a lot, the money supply by not as much. That's because banks, not the Fed, "create money," so if banks hold excess reserves and the public holds cash, the so-called money multiplier--the amount of money supply created per dollar of base money--is below 1. Thus, even the exchange identity above becomes irrelevant.

All history shows that this is the case.

No, it doesn't, because every example you can cite deals with a country with debt nominally denominated in a different currency. If the U.S. dollar were to depreciate as a result of expansionary monetary policy, it in no way impacts our ability to pay back our debt--in fact, it might become *easier* because that debt is denominated in dollars, and our ability to export just improved, meaning that economic activity will generally pick up. If our debt were denominated in, say, euros and the dollar were depreciating rapidly against the euro (hint: that's not happening--just the opposite, in fact), then we wouldn't be able to service that debt. That was the case in Zimbabwe, whose debt was denominated in pounds.

You can however, still do it to some degree under clever supervision and control. But you cannot just clear all debt in the world by printing money. This would create a level of hyperinflation the world has yet to see.

I don't think anyone really suggested "clearing all debt" -- if they did, they're an imbecile -- but there are arguments that this could in fact be done (MMT'ers, for instance). I for one think those arguments are horsesh1t, so no real disagreement on this one.

It is, at its most basic, all about the fundamental idea of supply and demand. If you increase the supply of cash rapidly, the demand stays the same.

No, it isn't like that at all--see the exchange identity above which incorporates velocity. If you increase the supply of money, interest rates fall. If interest rates fall, because velocity is an increasing function of the nominal interest rate, velocity falls. You can think of velocity as the inverse of money demand: if velocity falls, people want to hold more safe, liquid assets, meaning that money demand actually INCREASES. The increase in M pushes up on prices, the decrease in V pushes down. One might outweigh the other, but it's hard to get hyperinflation unless the central bank is literally asleep at the wheel and not the least bit credible at bringing down inflation. The 1970s were a good example of that, though Volcker quelled the fear of that ever needing to happen again.

After all, it is not like people got wealthier in the country where you start printing cash. We live in a globalized economy. All that happened is that they got more dollar bills. But all of these dollar bills are now worth less for each one.

Again, total bullcrap. Expansionary monetary--i.e., printing cash--can impact real variables in the short run because of wage and price rigidities, in which case, yes, it can in fact make people wealthier.

It is logical that the value of each dollar bill must decrease. Twice as many dollars in an economy makes those dollars worth half as much.

Again, total bullsh1t. See above.
~ResponsiblyIrresponsible

DDO's Economics Messiah
ResponsiblyIrresponsible
Posts: 12,398
Add as Friend
Challenge to a Debate
Send a Message
1/9/2016 2:36:51 AM
Posted: 11 months ago
At 1/4/2016 6:28:50 PM, 16kadams wrote:
Ceteris paribus, yes. But if you increase the money supply as the economy grows, you don't get inflation. Most economists favor expanding the money supply as the economy grows.

I'm going to nitpick this a bit, because it also misses the mark, lol.

Frankly, the "rate at which the economy grows" is inextricably endogenous--e.g., it's a function of, not an independent component, of existing money growth. It's virtually impossible to have one without the other, so it's a bit hard to say, "Okay, the economy grew X percent, let's increase the money supply by X percent" when the X percent increase in the money supply is what *caused* the economic to grow X percent. If you suggested that we ought to allow M2 to grow consistent with the rate of growth in trend NGDP--or at a level consistent with trend NGDP--that's a different story, but even then that discounts movements in velocity. My hunch is that there's a secular downtrend in global real interest rates (Stan Fischer just gave a speech on this, and the CEA authored a really nice paper on it as well), in which case there's a new secular low in velocity (and for that matter in NGDP). That, along with the still-elevated level of the monetary base, presents considerable challenges to both the link between the base and the money supply and the money supply and NGDP. So if we decide that trend NGDP is 4 percent, there's a lot more at play in determining optimal money growth, even if we opted to think in terms of money growth (which we don't, because there's so much bloody base money, though perhaps we should).

But low levels of inflation are not bad (whereas hyperinflation is).

Ah, but low inflation is bad! I'm sure you know this, but this remark reeks of reasoning from a price change, lol.

Obviously when I say "low inflation is bad," I'm oversimplifying it: I mean that low inflation as a consequence of a negative AD shock is bad. Why? Because inflation is low because employment is low, spending is low, growth expectations are low, perhaps there's a global flight to the dollar or China's consumption of raw materials has imploded (both of which are happening right now, obviously), etc. If inflation is low because of a positive productivity shock, that's a totally different story--those tend to be "transitory," which is to say that they usually spark production, investment, hiring, etc. and produce a rise in trend growth, though because productivity is higher, we can produce more stuff without generating inflation.

But there are really dire consequences of low inflation: increasing real debt burdens, declining growth expectations, higher real interest rates, etc.

If inflation increases, while the worth of each dollar falls, wages correspondingly increase. This means the net-effect is essentially zero.

This is true, though.

But I tend to favor NGDP targeting over what we have now. It would be a better indicator of when we need monetary expansion and when we need contraction. Even the libertarian Mercatus Center agrees (http://mercatus.org...).

I also love this plug.
~ResponsiblyIrresponsible

DDO's Economics Messiah
16kadams
Posts: 10,497
Add as Friend
Challenge to a Debate
Send a Message
1/10/2016 1:20:53 AM
Posted: 11 months ago
At 1/9/2016 2:36:51 AM, ResponsiblyIrresponsible wrote:
At 1/4/2016 6:28:50 PM, 16kadams wrote:
Ceteris paribus, yes. But if you increase the money supply as the economy grows, you don't get inflation. Most economists favor expanding the money supply as the economy grows.

I'm going to nitpick this a bit, because it also misses the mark, lol.

Frankly, the "rate at which the economy grows" is inextricably endogenous--e.g., it's a function of, not an independent component, of existing money growth. It's virtually impossible to have one without the other, so it's a bit hard to say, "Okay, the economy grew X percent, let's increase the money supply by X percent" when the X percent increase in the money supply is what *caused* the economic to grow X percent. If you suggested that we ought to allow M2 to grow consistent with the rate of growth in trend NGDP--or at a level consistent with trend NGDP--that's a different story, but even then that discounts movements in velocity. My hunch is that there's a secular downtrend in global real interest rates (Stan Fischer just gave a speech on this, and the CEA authored a really nice paper on it as well), in which case there's a new secular low in velocity (and for that matter in NGDP). That, along with the still-elevated level of the monetary base, presents considerable challenges to both the link between the base and the money supply and the money supply and NGDP. So if we decide that trend NGDP is 4 percent, there's a lot more at play in determining optimal money growth, even if we opted to think in terms of money growth (which we don't, because there's so much bloody base money, though perhaps we should).


Oh yeah, I have [had] cancer, I know what you mean

But low levels of inflation are not bad (whereas hyperinflation is).

Ah, but low inflation is bad! I'm sure you know this, but this remark reeks of reasoning from a price change, lol.

Obviously when I say "low inflation is bad," I'm oversimplifying it: I mean that low inflation as a consequence of a negative AD shock is bad. Why? Because inflation is low because employment is low, spending is low, growth expectations are low, perhaps there's a global flight to the dollar or China's consumption of raw materials has imploded (both of which are happening right now, obviously), etc. If inflation is low because of a positive productivity shock, that's a totally different story--those tend to be "transitory," which is to say that they usually spark production, investment, hiring, etc. and produce a rise in trend growth, though because productivity is higher, we can produce more stuff without generating inflation.

You troll, you know what I meant XD


But there are really dire consequences of low inflation: increasing real debt burdens, declining growth expectations, higher real interest rates, etc.

Krugman says no, and as Krugman says he is always right, you are wrong. :P

Therefore, vote Pro.


If inflation increases, while the worth of each dollar falls, wages correspondingly increase. This means the net-effect is essentially zero.

This is true, though.

But I tend to favor NGDP targeting over what we have now. It would be a better indicator of when we need monetary expansion and when we need contraction. Even the libertarian Mercatus Center agrees (http://mercatus.org...).

I also love this plug.

NGDP targeting = rek and deck
https://www.youtube.com...
https://rekonomics.wordpress.com...
"A trend is a trend, but the question is, will it bend? Will it alter its course through some unforeseen force and come to a premature end?" -- Alec Cairncross
ResponsiblyIrresponsible
Posts: 12,398
Add as Friend
Challenge to a Debate
Send a Message
1/10/2016 1:34:01 AM
Posted: 11 months ago
At 1/10/2016 1:20:53 AM, 16kadams wrote:
At 1/9/2016 2:36:51 AM, ResponsiblyIrresponsible wrote:
At 1/4/2016 6:28:50 PM, 16kadams wrote:
Ceteris paribus, yes. But if you increase the money supply as the economy grows, you don't get inflation. Most economists favor expanding the money supply as the economy grows.

I'm going to nitpick this a bit, because it also misses the mark, lol.

Frankly, the "rate at which the economy grows" is inextricably endogenous--e.g., it's a function of, not an independent component, of existing money growth. It's virtually impossible to have one without the other, so it's a bit hard to say, "Okay, the economy grew X percent, let's increase the money supply by X percent" when the X percent increase in the money supply is what *caused* the economic to grow X percent. If you suggested that we ought to allow M2 to grow consistent with the rate of growth in trend NGDP--or at a level consistent with trend NGDP--that's a different story, but even then that discounts movements in velocity. My hunch is that there's a secular downtrend in global real interest rates (Stan Fischer just gave a speech on this, and the CEA authored a really nice paper on it as well), in which case there's a new secular low in velocity (and for that matter in NGDP). That, along with the still-elevated level of the monetary base, presents considerable challenges to both the link between the base and the money supply and the money supply and NGDP. So if we decide that trend NGDP is 4 percent, there's a lot more at play in determining optimal money growth, even if we opted to think in terms of money growth (which we don't, because there's so much bloody base money, though perhaps we should).


Oh yeah, I have [had] cancer, I know what you mean

Lol.

But low levels of inflation are not bad (whereas hyperinflation is).

Ah, but low inflation is bad! I'm sure you know this, but this remark reeks of reasoning from a price change, lol.

Obviously when I say "low inflation is bad," I'm oversimplifying it: I mean that low inflation as a consequence of a negative AD shock is bad. Why? Because inflation is low because employment is low, spending is low, growth expectations are low, perhaps there's a global flight to the dollar or China's consumption of raw materials has imploded (both of which are happening right now, obviously), etc. If inflation is low because of a positive productivity shock, that's a totally different story--those tend to be "transitory," which is to say that they usually spark production, investment, hiring, etc. and produce a rise in trend growth, though because productivity is higher, we can produce more stuff without generating inflation.

You troll, you know what I meant XD

Eh.


But there are really dire consequences of low inflation: increasing real debt burdens, declining growth expectations, higher real interest rates, etc.

Krugman says no, and as Krugman says he is always right, you are wrong. :P

Krugman said there aren't consequences of low inflation?

He's written extensively about the so-called "problem of the two zeroes." His solution? 4 percent inflation target! So I find that hard to believe. But, if he has said that, he's wrong.

Therefore, vote Pro.

"My opponent source spammed; vote PRO!"


If inflation increases, while the worth of each dollar falls, wages correspondingly increase. This means the net-effect is essentially zero.

This is true, though.

But I tend to favor NGDP targeting over what we have now. It would be a better indicator of when we need monetary expansion and when we need contraction. Even the libertarian Mercatus Center agrees (http://mercatus.org...).

I also love this plug.

NGDP targeting = rek and deck

^
~ResponsiblyIrresponsible

DDO's Economics Messiah
Diqiucun_Cunmin
Posts: 2,710
Add as Friend
Challenge to a Debate
Send a Message
1/11/2016 2:25:54 PM
Posted: 10 months ago
At 12/31/2015 7:46:45 PM, GMZ2 wrote:
I know what you're going to say: "UUUUHH, MUH INFLAYSHONNZ!!1!!1"

But why? money is an abstract concept, like the boogeyman, so let's just disregard it entirely and make the world rich again (clear up the debt to start with.) Or maybe just abolish money, I don't know.

Bring it on, autists.

http://vignette2.wikia.nocookie.net...
The thing is, I hate relativism. I hate relativism more than I hate everything else, excepting, maybe, fibreglass powerboats... What it overlooks, to put it briefly and crudely, is the fixed structure of human nature. - Jerry Fodor

Don't be a stat cynic:
http://www.debate.org...

Response to conservative views on deforestation:
http://www.debate.org...

Topics I'd like to debate (not debating ATM): http://tinyurl.com...
famousdebater
Posts: 3,940
Add as Friend
Challenge to a Debate
Send a Message
1/11/2016 9:18:01 PM
Posted: 10 months ago
At 12/31/2015 7:46:45 PM, GMZ2 wrote:
I know what you're going to say: "UUUUHH, MUH INFLAYSHONNZ!!1!!1"

*facepalm*
"Life calls the tune, we dance."
John Galsworthy