
Governments must beware the lure of free money - olegious
https://www.economist.com/leaders/2020/07/23/governments-must-beware-the-lure-of-free-money
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phkahler
The irony is that the economic problems stem not from the pandemic, but from
the existing debt fueled economies that can not afford to slow down or pause
for any length of time.

As usual governments think borrowing and spending is the answer to all
economic woes, even those caused by debt in the first place.

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betterunix2
The alternative, an economy where borrowing is hard, would be even worse. Such
a system would basically amount to feudalism, where the wealthy perpetually
own everything and everyone else needs the support of some wealthy lord to
proceed with a project.

Moreover, an economy slowing down is a bad thing even if you ignore debt. A
small but noticeable example in the USA this year are the COVID-induced supply
chain disruptions. An economy that slows down is an economy that will delivery
fewer goods and services, and in the extreme it means not finding the things
you need when you go to the store (it is hard to forget the empty shelves in
supermarkets earlier this year). Nobody should delude themselves into thinking
that debt is the reason we cannot afford to pause the economy for an extended
period of time.

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extremeMath
So the best thing to do is buy now.

My parents retirement is screwed..these small interest bonds will mean nothing
with 10x inflation..

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betterunix2
There's always TIPS:

[https://en.wikipedia.org/wiki/Treasury_Inflation_Protected_S...](https://en.wikipedia.org/wiki/Treasury_Inflation_Protected_Securities#TIPS)

There is also the classic laddering strategy, where you buy bonds with a range
of maturities in order to reinvest the principle from shorter maturity bonds
if you anticipate rising rates on longer maturity securities, while mitigating
the risk that rates do not rise (i.e. inflation never comes).

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rapsey
Covid19 just accelerated what was bound to happen anyway.

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haspoken
[http://archive.is/s8AEO](http://archive.is/s8AEO)

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dr_dshiv
What's the worst that could happen, one way or the other?

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pstrateman
Hyperinflation which makes money not only worthless but useless.

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toomuchtodo
Unlikely to happen with an aging and declining population across first worlds,
_if_ you fix healthcare and education systems. Housing will need some
regulation too to prevent a rush of capital pushing up prices (more). Supply
is sufficient in most other goods and service sectors.

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pstrateman
More money, less people, would seem to make money worthless than it would be
with more money, more people.

Am I missing something obvious?

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betterunix2
It is not quite that simple. Money does eventually get removed from the system
when loans are canceled without being fully repaid. When people die with an
estate that is too small to repay their debts that is exactly what happens; it
also often happens when businesses go bankrupt, which would likely happen when
the population shrinks. Obviously this is a bit oversimplified, but the point
is that the money supply is not static thing where money is "printed" by some
central authority and then stays in circulation forever.

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einpoklum
Capitalists' bulletin says: Governments must beware issuing money rather than
borrowing from us. Credible!

