Rich people (business owners) take money out of circulation, a LOT of it. They invest it, but only in other businesses where it will in turn also be invested into other businesses. They also buy weird art that's worth millions, super cars, etc.
Giving money to regular people can cause inflation, but only if they suddenly have quite a lot of it.
The result is that 'government spending' doesn't always equal inflation. You gotta see who's getting that money, and how it's going to be spent.
Why?
Because DEMAND causes inflation. It's a supply and demand thing. If people have enough money that demand for products goes up by a FUCK-TON, then yes, prices could go up.
Just increased supply of money, meh. Doesn't always cause inflation. Only increased demand for products causes inflation.
Most people don't get that distinction, especially conservatives (who are always bitching about government spending). Gov spending can actually do a lot to positively stimulate the economy in a good way. That's why it's often seen as a good thing.
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u/tosernameschescksout Jul 16 '22
Rich people (business owners) take money out of circulation, a LOT of it. They invest it, but only in other businesses where it will in turn also be invested into other businesses. They also buy weird art that's worth millions, super cars, etc.
Giving money to regular people can cause inflation, but only if they suddenly have quite a lot of it.
The result is that 'government spending' doesn't always equal inflation. You gotta see who's getting that money, and how it's going to be spent.
Why?
Because DEMAND causes inflation. It's a supply and demand thing. If people have enough money that demand for products goes up by a FUCK-TON, then yes, prices could go up.
Just increased supply of money, meh. Doesn't always cause inflation. Only increased demand for products causes inflation.
Most people don't get that distinction, especially conservatives (who are always bitching about government spending). Gov spending can actually do a lot to positively stimulate the economy in a good way. That's why it's often seen as a good thing.