[Steve_American]

MMTers will tell you that the current inflation has little to do with the size of the stimulus spending.

The SF Fed put out a study that calculated that just 0.3 percentage points of the current (this was about a year ago IIRC) 7% inflation came from the Gov. spending. Why everyone just ignored that report is beyond me. Now I would say that the vast amount of it is caused by corporate greed (incl. OPEC), and to a lesser amount by the Ukraine War, with supply chains a distant 3rd.

However, if somehow the dollar did suffer from hyperinflation, this would wipe out all the debts of the poor nations along with all other dollar debts.

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[Unthinking Majority]

Inflation = Supply chains, ukraine war, pent up demand released post-COVID. Stimulus spending is a modest reason, let's not forget just about every developed nation in the world also injected cash into their economies, but i would think not the major cause.

[Steve_American]

Inflation = Supply chains, ukraine war, pent up demand released post-COVID. Stimulus spending is a modest reason, let's not forget just about every developed nation in the world also injected cash into their economies, but i would think not the major cause.

UM, 0.3 percentage points compared to 7 percentage points is 0.3/7 = 0.0428 = 4.3% of inflation.

So, the San Fran Fed. about a year ago, said the just 4.3% of the then current inflation was a result of the stimulus money. IMHO, 4.3% is a quite minor cause; and so neither a major nor a modest cause of inflation.

Yet, all I hear in the media is how it is the cause of the current inflation. It is almost as if the media is lying to us.
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[Unthinking Majority]

UM, 0.3 percentage points compared to 7 percentage points is 0.3/7 = 0.0428 = 4.3% of inflation.

So, the San Fran Fed. about a year ago, said the just 4.3% of the then current inflation was a result of the stimulus money. IMHO, 4.3% is a quite minor cause; and so neither a major nor a modest cause of inflation.

Yet, all I hear in the media is how it is the cause of the current inflation. It is almost as if the media is lying to us.
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Did they factor that virtually every significant economy in the world has injected significant money into their economies since COVID?

Canada, for instance, spent ~600 billion on COVID stimulus, which equates to $15,000 per person, and even higher per every working person.

[Steve_American]

Did they factor that virtually every significant economy in the world has injected significant money into their economies since COVID?

Canada, for instance, spent ~600 billion on COVID stimulus, which equates to $15,000 per person, and even higher per every working person.

I'm not sure if they did.

What does it matter that most every other nation spent a lot also on covid?

The paper was very technical, and so beyond me.

I linked to the paper in 1 of my threads. You can read it for yourself.
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[Puffer Fish]

Now I would say that the vast amount of it is caused by corporate greed (incl. OPEC), and to a lesser amount by the Ukraine War, with supply chains a distant 3rd.

You may have a point about OPEC, but I take issue with you blaming "corporate greed". If those corporations could raise their prices, what factors prevented them from raising their prices before? I mean, if this is really the cause, then what changed?

And how do you think the Ukraine War is causing inflation? (Since you claim it doesn't have anything to do with the money being printed to fund the spending) Most of those supply lines that were disrupted at the outbreak of the war have since shifted elsewhere and established a new order.

[Steve_American]

You may have a point about OPEC, but I take issue with you blaming "corporate greed". If those corporations could raise their prices, what factors prevented them from raising their prices before? I mean, if this is really the cause, then what changed?

And how do you think the Ukraine War is causing inflation? (Since you claim it doesn't have anything to do with the money being printed to fund the spending) Most of those supply lines that were disrupted at the outbreak of the war have since shifted elsewhere and established a new order.

The actual evidence for corp greed being a big part of the inflation can be seen in the growing corp profits and rate of profit. What changed was that there was some inflation from supply chain problems, so the corps could hide their extra price increases in those to cover their cost increases. Then, they were able to keep going it as the inflation continued.
. . . I find it amazing that you didn't see/know that corp profits massively increased or realize that their profits were increased by raising prices more than necessary to cover their additional costs.

You are wrong to say that the war didn'r cause ongoing supply reductions for the rest of the world. The flow of energy out of Russia was/is massively reduced. The supply of wheat from Russia and Ukraine was/is much reduced. The supply of potash from the area was also massively reduced.
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[Puffer Fish]

The poor nations should wish the US has some hyperinflation.

You never explained or provided any argument in your post for what is in the title headline of your post.

It doesn't seem like a very coherent thread or first post.
I'm almost struggling to ascertain what your point was, if there was any main point.

[Puffer Fish]

However, if somehow the dollar did suffer from hyperinflation, this would wipe out all the debts of the poor nations along with all other dollar debts.

That would be an immediate bonus to poor countries, yes, but it would come at a direct cost to the U.S.

(Talking about the overall US government debt is a separate topic, much bigger)

Maybe you don't believe other countries should have to fully pay back their debts when they borrow money?

And that is going to make everyone more reluctant to lend to others (at fixed dollar amounts) in the future.

Because of inflation now, it will result in interest rates being higher in the future, making it harder to repay loans in the future.

So your argument does seem kind of shortsighted.

It seems kind of like arguing people can get "free money" from credit card companies by taking money from them and never paying it back.
Someone is ultimately being "defrauded" and paying for that.

[Steve_American]

You never explained or provided any argument in your post for what is in the title headline of your post.

It doesn't seem like a very coherent thread or first post.
I'm almost struggling to ascertain what your point was, if there was any main point.

You said you don't understand, but in the next post you start off explaining why hyperinflation in the US would help poor nations, all of whom owe dollars to someone.

[Puffer Fish]

The SF Fed put out a study that calculated that just 0.3 percentage points of the current (this was about a year ago IIRC) 7% inflation came from the Gov. spending.

First of all, I am more than very skeptical of that claim. One suspects there may be some politically-motivated bias there. (Since Republicans have been accusing the Democrats of spending too much money and causing inflation, and the economists on the Fed board mostly lean Democrat)

I think to even discuss this, we might have to start a separate thread to delve very deep into that claim.

But the other thing, which a lot of people may not realise, is that the Fed actually "spends" a lot of money too. It's not just "the government".

[Steve_American]

That would be an immediate bonus to poor countries, yes, but it would come at a direct cost to the U.S.

(Talking about the overall US government debt is a separate topic, much bigger)

Maybe you don't believe other countries should have to fully pay back their debts when they borrow money?

And that is going to make everyone more reluctant to lend to others (at fixed dollar amounts) in the future.

Because of inflation now, it will result in interest rates being higher in the future, making it harder to repay loans in the future.

So your argument does seem kind of shortsighted.

It seems kind of like arguing people can get "free money" from credit card companies by taking money from them and never paying it back.
Someone is ultimately being "defrauded" and paying for that.

Well sir, you seem very confused about debts.

The US has always paid its debts and interest, ALWAYS.

Where in the world did you get the idea that MMTers and I ever said that the US should not pay its debts? Or, could, in some sense, choose not to pay them without creating a disaster?

MMTers and I assert that paying its debts is very easy for the US because it can create dollars to pay them. There is zero risk of involuntary default.

People, states, corps, and other nations must get dollars to pay back their dollar debts, this is quite different from the US.

You are (or seem to be) confusing paying your debts, with paying all your debts off. The US pays its debts by rolling them over, so far at least. There is no shortage of buyers of US bonds, and in a pinch, the Fed can buy them for a while at least.

For the record, I and MMTers have never asserted that the US should have moved its factories overseas, so it had to import so much, and so having a huge trade deficit that gave dollars to foreigners so they could buy US bonds. Nor did we assert that cutting taxes on the rich, which we now know has increased the deficit and caused more borrowing, was a good idea.

MMTers assert that having a surplus to pay off all the US debts would cause the worst depression the US has ever had. Also, they assert that in all 7 cases when the US had a surplus for a few years, it was followed by a Bank Panic, recession, or depression. In all 7 cases over a 200-year time span there was a recession or worse. The last case was the dot com recession of 2000.
. . . Feel free to deny this and explain why and how that would not happen.
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[Steve_American]

First of all, I am more than very skeptical of that claim. One suspects there may be some politically-motivated bias there. (Since Republicans have been accusing the Democrats of spending too much money and causing inflation, and the economists on the Fed board mostly lean Democrat)

I think to even discuss this, we might have to start a separate thread to delve very deep into that claim.

But the other thing, which a lot of people may not realise, is that the Fed actually "spends" a lot of money too. It's not just "the government".

And here I thought that all economists who work at the Fed are confirmed neoliberals.

Dem or Repud, it doesn't matter, because they are all neoliberals.

I'm going to have to not get into if the Fed's conclusion or 0.3 percentage pt. of the 7% inflation was caused by Gov. spending during covid, because I don't know enough, and would not know where to look to learn more about how the Fed came to that conclusion.

I thought that the Fed was a reliable source of the truth for people like you. It seems like you like what the Fed concludes when you agree with it, but then/now claim that it is biased toward Dems when you disagree. For example, it seemed like you agreed that interest rates needed to be raised to lower inflation and now you don't agree that just 0.3 %-age pts. were the result of excessive Gov. spending.
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[Puffer Fish]

I'm going to have to not get into if the Fed's conclusion or 0.3 percentage pt. of the 7% inflation was caused by Gov. spending during covid, because I don't know enough, and would not know where to look to learn more about how the Fed came to that conclusion.

If I were you, I would look at budget deficits.

Then look at the amount of inflation, the amount of federal reserve notes outstanding (in circulation), and calculate how much would need to be added to cause that inflation amount. Then see if there is a connection to the budget deficits. See if those two numbers are similar, or how similar. If one is not more than three times greater than the other, then I would say there's a very strong probability there is a connection. If there were absolutely no connection, and the two are random unrelated numbers, we might expect them to differ by a factor greater than 10.

I think I can help you. The amount on the Federal Reserve's Balance Sheet as of September 2022 was about $8.8 trillion. Assuming an inflation rate of 6.5 , that is 572 billion that would need to be added to give that inflation rate.
The budget deficit for 2022 was 1.38 trillion.

These are just rough numbers but that is close enough to suspect there could be a connection.
The amount of the budget deficit certainly could be enough to explain the inflation.

From September 2021 to 2022 the national debt increased by $2.5 trillion.

In basic theory, we would expect those budget deficits to be paid for by either an increase in debt or inflation.

[Steve_American]

If I were you, I would look at budget deficits.

Then look at the amount of inflation, the amount of federal reserve notes outstanding (in circulation), and calculate how much would need to be added to cause that inflation amount. Then see if there is a connection to the budget deficits. See if those two numbers are similar, or how similar. If one is not more than three times greater than the other, then I would say there's a very strong probability there is a connection. If there were absolutely no connection, and the two are random unrelated numbers, we might expect them to differ by a factor greater than 10.

I think I can help you. The amount on the Federal Reserve's Balance Sheet as of September 2022 was about $8.8 trillion. Assuming an inflation rate of 6.5 , that is 572 billion that would need to be added to give that inflation rate.
The budget deficit for 2022 was 1.38 trillion.

These are just rough numbers but that is close enough to suspect there could be a connection.
The amount of the budget deficit certainly could be enough to explain the inflation.

From September 2021 to 2022 the national debt increased by $2.5 trillion.

In basic theory, we would expect those budget deficits to be paid for by either an increase in debt or inflation.

Your point is unclear.

It seems like you reject the SFFed's numbers.

You are trying to equate the deficit and the inflation.

You seem to think that inflation happens like morning follows the night.

You don't seem the grok that the Gov. and Fed can't control the money supply, because banks create money just like deficit spending does.

You also don't grok that dollars used to import stuff can't impact inflation in the US, unless they come back somehow. Much of it doesn't come back. This also applies to dollars saved. As long as they are saved, they can't bid up prices. And, you don't grok that Corps choose to raise their prices. When there are shortages, this seems like a "natural process". But, corps made record rates of profit because they raised their prices more than their expenses were increased.
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