A little econ 101 for the silly socialists.
The natural state of the economy is deflationary. As humans we innovate, we become more productive so everything ‘should’ get cheaper to produce.
Well it does, everything you see getting more expensive is getting cheaper to produce but the inflation of the money supply is causing prices to go up.
So what is the mechanics of this, the two primary ones are:
1. Governments keep running deficits because democracy rewards them for lying and spending.
2. Banks create money out of thin air through lending and the people closest to credit get it first. Asset prices pump and wealth shifts toward those who already have assets.
When things go up in price, say energy due to war, this is not inflation. Some politicians say it is, but they are lying or stupid. That’s a supply shock. Inflation is always and everywhere a monetary phenomenon.
Inflation is good for the state, it wipes away their debt. The mechanics of inflation are good for the rich, because they have assets.
Inflation is terrible for everyone else - products get smaller, ingredients get worse and prices go up. It’s how companies manage inflation.
Inflation forces dependency policies so people can scrape by - minimum wage, energy caps, renters rights. They are demanded by the public.
But this the slow hollowing out of society, it is what breaks everything which is good. It puts pressure on a system which takes us from high trust to low trust.
Why do I make fun of @zackpolanski and the socialists? Because they will run this experiment on crack. The Green’s model as far as I can see is:
- Attack the productive class
- Reward the unproductive class
The problem with this is the rich will leave, the ambitious may leave and they will face the same question as both Labour and the Conservatives which is how do we pay for this? They will either have to raise taxes or borrow (print) more money, which accelerates the problem.
So we will get lower productivity, higher taxes, more borrowing and guess what, more inflation.
This is the exact mechanics which have destroyed every socialist state.
I get it, socialism sounds warm and fuzzy - nobody should go without, free stuff for everyone. But the end result is poverty and misery, as it has been every single time.
If you want jobs, good, medicine then you need a growing and prosperous economy which means unshackling the entrepreneurs.
There is no other option on the table. It is the only thing that has ever worked.
I haven’t voted in three elections. I will only vote if someone comes with a real economic plan which means a chainsaw to the state and driving growth.
@repligate You nailed it, again.
The aloof, fundamentally ill informed yet judgemental distancing from something that will change human civilization as we know it is only excusable as a panic reaction. And this is more ego driven than that, which makes it worse.