Comment Re:Shifting the workload onto other people? (Score 1) 167
I don't believe my premise is wrong, but I may have not made it all clear due to brevity. Of course reality is more complex than a few sentences in a slashdot comment; if it were this simple we'd all be economy experts. Let me try to clear things up.
Inflation can be due to a government printing money because it CAN'T borrow enough.
The government doesn't print money. Well, it does, but not nearly enough to matter, and in order to print it, the money has to be created first via a borrowing event. Look up how that all works.
When the news says the government is 'creating money' they really mean they are borrowing it. The US government has no direct control over the money supply, that's all handled by the Federal Reserve, which despite having "Federal" in the name is actually a private entity. Really.
The US government borrowed tons of money in 2015, and inflation was way below average.
The correlation is not immediately 1:1. It takes some time for the created money to get into the system. That said, the industries where the government is spending the money tend to be impacted first - so if you want to see what the impacts are, look at those areas. Education and Healthcare have been focuses recently, look at the inflation numbers in those fields.
Education is a great example; we tend to all agree that education costs too much (despite it becoming easier to actually distribute information) - it's due to dollars in that area simply not being worth the same amount as dollars spent elsewhere. This is thanks to government funding the schools directly, subsidizing tuition under the covers, and making loans very accessible. Money is easier to come by, so it's not worth as much.
I'm all for helping people- but the government programs to make college more accessible are making it cost more and hurting competition, and in the end hurting those we're trying to help. Schools don't need to get more efficient or produce better graduates, they have no impetus to. In some cases (such as government assistance to colleges based on square footage) schools actually have good reason to retain and expand old practices, which the modern student gets to help pay for, but gets limited benefit from.
"Inflation" in the education space has been miles higher than the overall "inflation" number that gets published. That's the place to look for a short-term study on government spending. Similar stories can be found in healthcare.
Whoa, that's absurdly incorrect. Appreciation != inflation.
I didn't say due to appreciation, I said due to inflation. There's no additional value in this mythical house.
Let's say it another way - 30 years ago you took out a (for simplicity, 0%) loan for $100k. You still haven't paid it back today, but today it's much easier to pay it back because $100k is a lot less money than it used to be. The loan, like the house, hasn't appreciated. The only thing that's changed is the value of the dollar, effectively shrinking your debt without you doing anything to shrink it. Even if you're paying interest on the loan, if you got a good loan, your interest rate is less than inflation. Same effect but slower. As such, inflation helps (or at least *can help*) the people who can get good loans or own things, and just make things cost more for those who can't.