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If you don’t see that our deflationary world is becoming an inflationary world, you’re just not paying attention.
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Student loan debt is crushing millions of families. That’s why I’m calling for something truly transformational: Universal free college and the cancellation of debt for more than 95% of Americans with student loan debt. Read all about it here: medium.com/@teamwarren/im
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I don’t get how handouts to the 1% don’t fuel inflation but handouts to the bottom half do. Genuine question. Is there a structural trick used? Does QE fueling stock buybacks leading to wealth appreciation for stock owning class work differently than forgiving student debt?
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Yes, financial asset price inflation for rich and experiential non-asset price inflation for poor. The former is privileged (persistent, fungible, inheritable), while the latter is none of those things. The latter is “counted” as inflation, while the former is not.
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Correct. Financial asset inflation has no (direct) impact on wages/prices as there’s no consumption change. It’s sterilized (mostly) in market-world. Experiential non-asset inflation leads to dramatic consumption increase in real-world. See healthcare as example.
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Hmm. I see what you mean. Even if you sell financial assets somebody else is left holding it. Forgiving debt otoh is retiring an asset on the other end, so closer to either a sudden crash or a deficit hit for the state. A step-function decrease in asset base backing the currency.
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But it seems to me that there’s an externality here. Some fraction of student-debtors newly unburdened from debt might take on a higher value/risk activity. Quit a bullshit job, force automation of it, and create new wealth. Delayed freedom/innovation dividend.
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I think many people will FEEL better. Which is the whole political point. In my experience, the core human response to feeling better is to consume more good-feeling things, not make an entrepreneurial investment in time/money. But I hope you’re right.
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