The Rich Love Inflation, And Will Never Give It Up (Willingly)libertarianinstitute.org/articles/the-rich-love-inflation-and-will-never-give-it-up-willingly/?mc_cid=e04032a4ab
298 sats \ 5 comments \ @Undisciplined 9 Oct econ
Is the American economy built to help the middle class or the rich? Thomas Eddlem argues that the government has established a system to benefit the rich.
"In America today, the working poor and the middle class are the ones subsidizing rich real estate developers and hedge fund shareholders with their wages and checking account deposits."
write
preview
related posts
28 sats \ 4 replies \ @Rothbardian_fanatic 10 Oct
The rich are really helped by the asset inflation because, by and large, they are the ones that own the hard asset classes, for instance stocks, bonds, companies and land.
Inflation rewards debtors like the real estate developer owners of mortgaged properties, but it punishes creditors who are owed cash-based assets and those holding cash by making those assets worth less. There is approximately $27 trillion in cash, savings, and checking accounts in the $29 trillion U.S. economy, and wages are about $12.5 trillion of that economy. And all of the wage proportion of the economy is cash-based, meaning that wages are one of the prime sources from where these gains are extracted—just like the wage-earning depositors being cheated in my Venezuelan example.
This is highlighted in Austrian economics by the saying the closer to the newly created money the larger the advantage.
Can you show me how inflation and newly created money benefits the lower and middle classes in any way besides the wonderful feeling you get when you cannot pay the bills?
reply
10 sats \ 3 replies \ @Undisciplined OP 10 Oct
It's really a proto-Austrian insight from the French Physiocrat Richard Cantillon.
reply
38 sats \ 2 replies \ @Rothbardian_fanatic 10 Oct
Yes, Cantillion had this insight and used it durning the tulip bubble and the Mississippi bubble. He made himself handsomely rich doing it, too. I guess you could say he was proto or pre-Austrian.
reply
10 sats \ 1 reply \ @Undisciplined OP 10 Oct
Pre-Austrian might be better, depending on his overall approach to economics.
reply
24 sats \ 0 replies \ @Rothbardian_fanatic 10 Oct
His approach seems to have been on what the latter Austrians based their thought, in terms of money and banking. Rothbard used him and his theories as explanations quite a bit.
reply