Ok, maybe not intentional in the sense that there is a conscious war against savers. But the effect seems the same.
“Inflation is a collective consequence of everybody desiring to consume more than we produce. When a society as a whole likes to live beyond its means, you get inflation.”
Your example of the credit card cash advance is interesting. Isn’t consuming more than we produce only possible by ever increasing debt? If the credit card cash advance has a limit, so should inflation. Isn’t inflation simply the result of more newly created dollars running around looking for homes? This doesn’t seem as easy to do without a fiat system. Doesn’t all new money come into existence as debt? My point is an ever increasing amount of dollars has to be in circulation to continue to fund the imbalance. If individual spending recklessness has consequence then why shouldn’t national spending recklessness? Just like the individual, doesn’t our nation eventually either have to walk away on its debt obligations or begin to make some very drastic and painful changes in spending?
“For the simple reasons that population is growing and the productivity is also growing. Do the math, if GDP does not grow, the hours worked per person must drop.”
I’m not overly informed I guess, but this doesn’t make sense to me. Isn’t GDP simply a measure of the total dollars spent and not a measure of the productivity purchased with those dollars? What I am getting at is if you are paying for the same productivity with inflated dollars how can GDP accurately reflect productivity? Also, how can you assume productivity increases just because population does? People have to be gainfully employed actually producing something for productivity to increase. It seems real productivity growth could actually be a small part of GDP growth.
I don’t think a lot of hours worked have anything to do with productivity. I must admit that I don’t really produce anything for society yet I am highly paid. I don’t think a lot of the “workers” in our society do either. Spending all day trying to reshuffle inflated dollars between accounts may employ a lot of people but doesn’t seem to have real intrinsic value. I can see how it would be optimal for there to be neither inflation nor deflation and for the relative purchasing power of a dollar to remain constant. Erring continuously on the side of inflation must certainly have eventual consequence.
Isn’t the main point how much you get for your dollar and not how many dollars are out there? It seems strange for anyone to argue that increasing the supply of dollars consistently faster than real productivity is a good thing. All those new dollars are created at the expense of future productivity (interest). Am I wrong to wonder that interest is charged on money that never existed before? I wish I could create my own money out of thin air and tax future productivity for the service.
How long can we continue to put off eventual repayment of our collective debts? When does the tax on future productivity for all this interest show up? How much longer will creditors issue us new cards to help us shuffle around and increase our debt? It is entertaining to make fun of foolish home debtors, but isn’t that an allegory for our nation as a whole?
