If you don’t see that our deflationary world is becoming an inflationary world, you’re just not paying attention.https://twitter.com/ewarren/status/1120296821300060160 …
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Replying to @EpsilonTheory
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?
4 replies 1 retweet 29 likes -
Replying to @vgr
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.
2 replies 14 retweets 55 likes -
Replying to @EpsilonTheory
And is one kind fundamentally more dangerous and fragilizing than the other, for Wonky Reasons?
2 replies 0 retweets 4 likes -
Replying to @vgr
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.
3 replies 4 retweets 26 likes -
Replying to @EpsilonTheory
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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Replying to @vgr @EpsilonTheory
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.
3 replies 0 retweets 7 likes -
Replying to @vgr
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.
2 replies 0 retweets 3 likes
I’ve vaguely reminded by Hernando De Soto type arguments around how making land titles clearer boosts economies. Here it is lives under illegible and dubious value debt burden rather than land with murky titles.
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