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Fri Mar 20, 2020, 08:42 AM

A couple of questions for the better educated readers

I have no economics background and am totally ignorant as to how macroeconomics work.

The government is about to flood the economy with money. I understand that they are trying to do good in a time of crisis and it sounds good to me as a high school educated tradesman. I understand that people are desperate after losing their paychecks, an I have a very charitable heart for workers, and it seems like the only right thing to do.

In my personal situation, I am retired, and live off of a small savings and a small pension, backed up by Social Security. I have been confident that I have enough resources to get by, in the modest lifestyle I am accustomed to, for the few years I have left, unless the value of my savings, home and income are wiped out by inflation.

Is this flood of money going to cause hyperinflation when the virus ends, or is it "chump change" to the government? It is my understanding that the government went into this deep in "credit card debt" and has virtually no "savings account." Has Uncle Sam been hiding trillions of dollars under the mattress or are they buying paper and green ink by the trainload, essentially counterfeiting money? Is the National government's going to go bankrupt because the government got sick without having enough savings or insurance to pay the hospital's debt collector?

I remember seeing photos of people in the Wiemar Republic, following WWI, buying bread with wheelbarrows full of cash. (which paved the road to the rise of the Nazis) Of course there are some people in this country who will have wheelbarrows full of cash to burn through, they will be fine come what may. In fact, it opens opportunities for those folks to buy up everything.....What happens to the rest of us?

I know some folks will say that during a medical crisis, it is not time to worry about such issues, and perhaps they are right. There may not be a damn thing we can do about it anyway. I am a "planner" (worrier) I have gotten through life by planning for things before they happen so I have to think about this kind of stuff.



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Reply A couple of questions for the better educated readers (Original post)
Chainfire Mar 2020 OP
jberryhill Mar 2020 #1
Laelth Mar 2020 #2
lark Mar 2020 #3

Response to Chainfire (Original post)

Fri Mar 20, 2020, 08:48 AM

1. "The government is about to flood the economy with money"

 


Yes, but a whole lot of it just vanished.

Putting $1000 into the pockets of people who were going to have a lot more than that, but now don't, doesn't increase the amount in circulation.

IMHO, things are going to look at lot more like 1932 instead 1972.

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Response to jberryhill (Reply #1)

Fri Mar 20, 2020, 08:51 AM

2. Agreed. Deflation is a much greater risk, at this time, than inflation.

A deflationary spiral was what we saw during the Great Depression.

-Laelth

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Response to Chainfire (Original post)

Fri Mar 20, 2020, 09:04 AM

3. I'm no economist, but I'll tell you what I think and am seeing.

1 - drumpf escalated this greatly by insisting on cashing out personally from it & that's still his driving purpose
2- He wants to destroy the working class and is using this as a vehicle for that purpose
3 - He will flood us with money (vast majority going to the rich ultimately of course) and then steal all the workers money to repair the hole the rich blew in the budget. In other words, this is an excuse to destroy Social Security and Medicare and probably Medicaid as well since they also really hate the poor.
4-If people wise up and realize he is to blame, well the crisis will be so bad he will postpone the election, for our safety of course.
5 - SCOTUS is all in on the Russian Repug plan for the destruction of our liberal society and the takeover of the rw fascists.

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