You can't help soften the blow of inflation by giving people more money! That will just cause more inflation and make everything worse!

We've all heard it a thousand times, giving normal working class people, especially poor people, more money will only make everything worse by causing more inflation. Somehow this will leave the majority worse off than if nothing had been done.

This is considered common sense among liberal-conservatives but as leftists we instinctively know that it is bullshit. Maybe higher wages and benefits would increase inflation but the net total is that the working class would be better off than before.

Instinct is not a very convincing argument though so how do you argue the case against the wage inflation spiral to liberal-conservatives?

  • D61 [any]
    ·
    2 years ago

    Silly assumptions this inflation/wage increase logic requires:

    1. People would only spend the increased income of "stuff" instead of paying down bills or debts. Example: An increase in income for my household would have us paying down our credit cards and working on some loans as the first dollars spent and not going out and buying a brand new car (which we don't need yet.)

    2. People would keep buying things after they've already bought them. Example: The thinking that a household that buys one gallon of milk would buy two gallons of milk for no other reason than the household has enough money to buy another gallon of milk, not because the household needs another gallon of milk.

    3. All extra expenses that an increased income could pay for are things that have a definite supply. Example: TV's take more time/resources to manufacture, deliver, and stock to a shelf when demand goes up. Going out to eat at a restaurant does not increase time/resources to the same degree.

    4. Increased demand for "goods" can't ever be "caught up to" by the manufacturers of the goods. Example: Thinking that a temporary shortfall in computer monitor production would never catch up to the demand for computer monitors so the inflation in prices would never deflate.