this post was submitted on 30 Sep 2023
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the tantrum, btw
Fun fact for those on the fence about this, the US has monetary sovereignty in a fiat currency, which means that the US government has essentially infinite money.
Edit: for those that are curious, yes, the game about the federal budget is exactly that. The deficit is essentially tracking the amount of money that the federal government owes to itself. Remember, fiat currency means that the value of money exists because the government says that it holds that specific value. A $2 dollar bill is still worth $2 when purchasing items, but worth several $ more than the printed value.
Edit 2: I didn't think it needed to be said, but I've been proven wrong. I don't literally mean infinite money.
I wonder, sometimes, what a society would look like without inflation. Is there an economic system that says "this is the price of bread, from now on" and builds off of that?
Of course, my only talents are music and memes, so I doubt that I'd specifically benefit from such a system, but maybe humanity as a whole?
One of the reasons some inflation is 'good' is that it drives investment. People are discouraged from saving their money since it will slowly devalue. Rather, those with capital are incentived to invest it in other areas of the economy.
That would only happen if deflation was a thing too. In my (highly idealistic) world, money would not change value at all, so growth in a business would be real, not just projected numbers on a chart no one understands. In a fixed-econony, you invest into businesses that actually grow.
I know this may come off as controversial, but this sort of thinking will be necessary for interstellar trade, if we don't blow ourselves up first.
Could you elaborate a bit on that? I'm not really sure how a business that "actually grows" would be functional ina fixed economy without becoming confusing graphs or entering some other major problem.
Like, the business actually gets bigger: opens more stores, creates new products, offers more services. The regulatory system behind this is starting to sound a bit tankie though, so I'm gonna shelve it for more thought.
Taxes are the current most frequent form of deflation in any country with a sovereign currency. The government spends/prints money in step one, the currency circulates through the economy in step two, and the last step, taxes, is your anti-inflationary device.
Certain people could be taxed more....