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66 sats \ 6 replies \ @nerd2ninja 20 Feb \ on: Trump, Musk To Discuss Sending US Taxpayers $5,000 Checks Using DOGE Savings Politics_And_Law
That's gonna be inflationary as fuck boi.
NGU! Wen Lambo?
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Not necessarily, the alternative is deflationary collapse
Not every dollar printed sticks around, interest payments destroy dollars which is why they need to brrrrr in the first place... its a balancing act but the risks are asymmetrical bad to the downside
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No but Justin look, its a payment to everyone indiscriminately. That's why its going to be inflationary. Its not just to people who have high interest rates to pay off or rich people who probably won't spend it anyway because they already have so much money.
Just look at any town with a government project. The pipeline used to be a huge example. When its known that (almost) everyone makes so much money, prices go up. Whereas if only a few people have a bunch of money, well they aren't changes prices based on who you are.
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In terms of money supply, it's less money in circulation than was already being spent. Fact not speculation.
The effects may be different sure, it's less towards mortgages in the DC area and more towards down payments on Ford Expeditions somewhere in the sun belt...
Still, as long as it's less than was already going out (claimed to be 20% of savings) then its only slowing dollar destruction, not increasing the overall supply to chase after goods.
EDIT: I still think its good for corn, better that 5k be free to chase corn than 25k paying DC mortgages. Trump is an economist, he doesn't want inflation, and sees assets like corn and stocks to be a measure of savings health.
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In terms of money supply, it's less money in circulation than was already being spent.
So I don't know if you picked up on this or if you missed it. Yes its the same money supply, but the money velocity I would argue is going to look a lot different. Not everybody is bogged down with debt, but everybody is going to get this money and not everyone is bogged down with debt is going to use all of this money to pay off that debt (should, but won't)
This is why I'm arguing that while the money supply will stay the same, there will be a greater money velocity.
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velocity
good distinction, and yes it'll look different... I used the expedition example because my truck outperformed Bitcoin after covid stimmies, lol
But you're still buying stuff FROM somebody, when you buy a car the dealer pays off their floor plan... which is debt
When you buy a deck, the builder has debt...
It all goes towards debt eventually in a debt based monetary system, to your point it might take extra hops (the builder and the car dealership)... but that's much different than supply inflation which is sticky and broad... I don't think we'll see beef or egg prices get worse for example.
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