Topic: Inflation that's equally distributed. (Read 2069 times)

Actually, it is wealth redistribution through the guise of inflation.

How would you define the term "socialism"?

Because I suspect it's not how the term is defined in the dictionary.

This is just robbing savers.

You should only be able to consume what you produce. Using force to impose any other distribution system will be less optimal. If an individual is so unproductive that they cannot sustain themselves, they must rely on the voluntary charity of their peers.

LOL that's some Grade A Bullshit my friend. 
 

This is a great explanation of why it helps me when other people "hoard" (save) their money.

That isn't true, because the value of money, like the value of everything else, is subjective. Each person may have the same amount of money, but that does not make them equally wealthy, and it is wealth, not currency, which is you are fundamentally trying to equalize.

The root economic cause of most wealth inequality is simply that some people choose to save and invest, while others choose to consume and live paycheck-to-paycheck. No amount of redistribution will bring about equal outcomes in the face of unequal preferences and goals. To make people truly equal you would have to take away their freedom to choose.

Let me put this very simply, say we have a nation of people, nobody has anything, they are all equal.

0 = 0 = 0 = 0 = 0

then, we give them an equal share, every one gets 100 units of currency.

100 = 100 = 100 = 100 = 100

Now, if you enjoy your math, like I do, this equation is basically unchanged, and are essentially equal to each other. (when solving equations, adding the same thing to both sides of the ='s sign does not change the end value of the equation. In this way, we could still say that this is basically equal to 0's all around, but since we aren't using variables I will refrain since it isn't quite something I can explain)

Now, all of these people need the exact same things to survive, however all of the different things do not cost the same. A pound of meat from the butcher may cost more than a dozen eggs from the farmer, etc. So, these people trade based only on their needs for survival, and not focusing on their wants, especially not on what they would want to do for careers.

We might end up with a little something like this:

140 != 100 != 60 != 130 != 70

Can you see where this is headed? Why should the butcher, with his 140 units, pay any more to the others just because they are receiving less? He doesn't NEED any more things. So let's factor wants into this, to hope it balances itself out.

120 != 90 != 80 != 110 != 100

Yay! we got a little more balance because the people who wanted some extra because they could afford it, went and got some extra. However, did you notice what just happened without being displayed in the numbers? The people that just spent more because they could now have more than the other people. This economy is now at a very basic level unequal, regardless of the currency each has! Now the others are going to resent the people with more and wish they could have been the butcher. The butcher has enough money to buy the materials to make his own little farm and even hire someone to take care of it (plus room and board), so the original farmer has no real way of getting the butcher to pay more.

Now, I could factor in the financials of this, where the farmer needs to take out a loan to fix his barn or buy some more seed, so he borrows from the butcher and is now making less than he did in the first place and thus creating more and more inequality, but I'll stop here because this has already become a wall of text.

Society is inherently unequal, and it is best to play off of those inequalities in the best way each individual can in order to get ahead for a period of time. However, nothing lasts forever.

This is what Milton Friedman was describing when he suggested dropping money from helicopters.

This is what Bernanke has also since referred to, giving himself the nickname "Helicopter Ben."

Of course, we all know by now that increasing inflation does not lead to prosperity. Spending for the sake of spending does not improve the health of an economy. Cheap money only distorts the market, and although a flat rate distribution to all currency holders would be preferable to a focused distribution through banking channels, a market functions best when it is not manipulated.

yes yes

A good example of uniform inflation is a stock split.  Everybody knows the new stocks are worth 1/2 as much and so you didn't really change anything except divisibility. 

 

If you updated all paper, coins, account balances, bills, contracts, books, etc, etc, etc at the same time, then the marginal utility of money relative to other goods would be unchanged by proportion.  There would be a tiny temporary effect if you didn't update people's memories at the same time.  But say that you could...

It shows that perfect uniform inflation or deflation (however impractical in reality) would have no effect on anything at all.  Which means that any effect that inflation (in reality) has is purely caused by unfairness.

Even that wouldn't be equitable. You would also have to adjust all prices and contracts, taking into account that the marginal utility of money relative to other goods will vary from individual to individual, and that the existing contracts may already have taken into account a greater or lesser expectation of change in the money supply over time. In short, absolutely equitable manipulation of the money supply is an impossible goal. The necessary information simply isn't available, even if you had the power to make those changes.

Yeah. The money that can hold the most demand back from real goods is the money that wins.

Right.

And there's other insidious side-effects to increasing nominal prices, even if the newly printed money is perfectly evenly distributed.  Specifically: many laws/statutes/codes have hardcoded monetary values and are not automatically inflation-adjusted.

And so, as nominal prices rise due to the inflation, more and more people get caught in, for example, various reporting thresholds.  E.g. the $10000 for transporting cash across borders today is a much smaller amount in real terms than when that number was originally coded into regulation.  Rising nominal amounts are yet another way in which governments surreptitiously ensnare ever-increasing numbers of citizens under their regulatory control.

There are no positive effects to society from printing money.

The reason we don't want that is that we really don't want people to consume, we want them to save. Every time someone consumes we get poorer, because we have less things to consume. Every time someone saves up (refrains from consuming) we're richer, as a whole, because he has produced something of value, but not consumed anything in return.

Yeah rich people aren't going to hold that money.

And the rich 'spending' means dumping it and the poors (and slow rich) will pay for it in further currency devaluation. But hey, you could just dish out more money to make up for it.

Well if that is actually what OP suggested then that is a stupid idea because it's socialism and we all know socialism doesn't work.

Bitcoin already effectively does this.

The reason is that what will happen once 1 BTC is worth so much that we move the decimal point 1 spot to the right effectively new bitcoins will be introduced and everyone will get 10 times as many as they had before that change.

They won't. Rich people have a very small part of their wealth in the form of money.

It is not a good thing to force people with lots of money to use it to consume resourses that others could have used instead.

Even if the money and inflation was distributed using pure math with division you can bet all the political groups in the world are going to find some reason to bitch about it.

It's just a numbers trick then and nothing is actually happening and there is no point but to add confusion or maybe trick the dumbest few percent into thinking a real terms wage decline is an increase because it is a bigger number.