prices go up?

Why.

Help.

Why is government printing more money and giving it to me a bad thing. I need it to live.

I’d like both the econ101 (fake, lib, propaganda) and the marxist (real, truth, based) answer pls.

  • plinky [he/him]
    ·
    edit-2
    2 years ago

    But there isn’t any more stuff to buy, it is exactly where demand side kicks in. Say you have excess money and previously couldn’t buy, idk, ducati bike. Well now you and millions of people can buy it. Ducati will be like “omg, we can’t produce this shit this fast, but we can raise prices to a level where what we produce will be sold” (see gpus in pandemic). So prices immediately will rise across the economy. In actuality, some goods with flat demand (like necessities bread and stuff) won’t rise due to doubling of money that much, but rare stuff will more than double.

    On average everything will double, but it will differ product by product.

    With savings it’s why I included “closed system”. Yeah, some money will go to savings (again, as in covid), and will slowly bleed out back into economy. Some will be spent in financial gambling, inflating prices there.

    • stinky [any]
      hexagon
      ·
      2 years ago

      Ok, so it’s the companies that choose to increase prices to make more money. They can keep selling the bike for $100,000 but they choose to sell it at $300,000.

      But that doesn’t have to happen. If the govt. said “no, you can’t just increase the price”, then the bikes would sell at $100,000 via like a first come first serve or a random lottery or whatever.

      And for essentials you can just divide the stuff like bread among everyone to ensure no one starves or dies.

      Like, that would just be a fairer way to do things.

      But, if I’m understand your point of money as measurement, that would mean you get $100,000 times the number of bikes sold as the “economy number” instead of $300,000 times that, which is bad)

      • plinky [he/him]
        ·
        2 years ago

        Well, it’s what ussr did, goods were cheap, but for some of them you have to wait in a sort of a queue (I think they sold cars this way), maybe yugoslavia as well (?).

        For economy number, it’s kinda meaningless thing in itself (it is why people talk about inflation-adjusted gdp, you can double gdp easy peasy otherwise).

        Opposition to inflation is mainly in debt holders (banks/other states), and porkies aren’t too thrilled with it, but only if it’s accompanied by worker discontent, otherwise they also ironically benefit from inflation.

        There is also kind of uncontrolled mass psychology, that if inflation happens too rapidly, it can topple the government real fast, even if people can still eat. It introduces uncertainty of what your own holdings in bank are worth, so you transfer them into something tangible (gold/beans/collectibles), so amount of money increases further than government expects, because people “don’t trust the money”

        • stinky [any]
          hexagon
          ·
          2 years ago

          Were the USSR and other socialist states that did that successful? Why did they fall? I know that’s wildly off topic, sorry.

          • plinky [he/him]
            ·
            edit-2
            2 years ago

            I think people would have accepted increased prices for faster production tbh, but god (and couple of 80 year old russian dudes) knows how pricing in ussr worked. Ussr arrived at a problem where there is nothing to spend money on, cheap stuff is cheap, expensive stuff is queued and rare. Realistically they should have started fixing it from that rare side, but instead they imploded the cheap stuff production together with expensive stuff and allowed all savings vanish in inflation after the fall.

            They could have used long queues as signal that “we need produce more of that” (same as capitalist does with prices), but they didn’t, or didn’t do it enough.

            So I would describe it as mildly unsuccessful in adapting to changing reality, but successful in providing for people.

            • stinky [any]
              hexagon
              ·
              2 years ago

              Oh yeah I didn’t realise the part where the additional money you charge for the same product can be used to decrease the time needed to make more of that stuff. There might be a better solution than that but idk.

            • stinky [any]
              hexagon
              ·
              2 years ago

              How did it collapse, do you know?

              Were people’s basic needs met in the USSR and other socialist states?

              I thought there was a black market which made some people very powerful (party members and private individuals). They orchestrated the coup to get more power right? That’s what I’m thinking might have happened.

              I don’t know how it could collapse if people were happy.

              • plinky [he/him]
                ·
                edit-2
                2 years ago

                There was giant price mismatch. they’ve allowed private individuals buy at government price, but sell at whatever, so lot of goods simply disappeared from worker reach, and some people got very very rich, while some stuff just disappeared, factories couldn’t buy some of their inputs at expected prices, etc.

                Well, people at the party were that inept. People didn’t want ussr gone, but they weren’t prepared for the horror that happened, and didn’t fight that much.

                *that’s just my understanding, I don’t know a lot about it

                • stinky [any]
                  hexagon
                  ·
                  2 years ago

                  they’ve allowed private individuals buy at government price, but sell at whatever, so lot of goods simply disappeared from worker reach

                  I…I don’t understand how the party could be that fucking incompetent? Like…why the fuck would you allow that at all???

                  Have the sale be forced at the same price. WTF is the need to allow this kind of profit.

                  • TreadOnMe [none/use name]
                    ·
                    2 years ago

                    Because a lot of them saw that they weren't making as much money as their U.S. middle-man counter parts and wanted a piece of 'American luxury'. Also, by this point, most of the political party had lost the zeal and intellectual rigour that dominated the party in it's first 50 years. It was easier, if you were smart, to either cloister yourself in academia, or become an engineer, than deal with the backroom political bullshit.

                    We are seeing a similar thing occur in the U.S. where most of the highest political operators are entirely self-motivated, even at the expense of the system itself. There are few George Bushes left in the system.

              • familiar [he/him]
                ·
                2 years ago

                Here is some of the best reading I've found (sources cited) about that topic:

                https://invent-the-future.org/2017/11/why-doesnt-the-soviet-union-exist-any-more-part-1-introduction/

                It was a very complex event that can't be summarized in a forum post imo.