Comment Re:Pay up or shut it off. (Score 1) 132
The wealthy aren't the problem with inflation. Giving money to them (or not taxing it away from them, same thing) isn't inflationary, they'll more or less invest the money to increase their wealth. Rich people always want more money.
Ah, but for the most part, that money just sits there. Investing money in stocks has only limited impact on anything, in practice, which is why it doesn't impact inflation much. The money doesn't ever get spent on anything that meaningfully contributes to strengthening the economy.
Cutting checks to people on the street, that's inflationary because they spend the money on goods.
It is, but not proportionately. The increase in funds availability does increase demand, which increases scarcity, but the price people spend on goods and services doesn't increase to absorb all of the extra money going in — just some of it. That's why if you compare San Jose, CA to Jackson, TN, the median salary differs by more than a factor of 2.8, while the overall cost of living differs by only a factor of 1.9 (and if you ignore the housing costs that are largely caused by San Jose being landlocked, by only a factor of 1.5).
Improving people's standard of living has little to do with giving them money. You need more goods, which then become relatively cheaper within the existing money supply because of the lack of scarcity. That means producing said goods, whether we're talking about consumer stuff or housing.
While true, absent government intervention in how people run their companies, you can't prevent scarcity. Scarcity allows companies to charge higher prices for the same amount of labor, so except when you're talking about true commodities, companies have a perverse incentive to keep supply down as much as possible, so long as they stay below the point where the profit margins become too high relative to the barriers to entry into the market and another competitor is encouraged to enter the market and compete with them.