All of that is to say, we could do with a couple of decades of 3-4% inflation. Implementing UBI very likely would trigger some inflation, but if there's one thing central banks know how to do and have the power to do, it's clamping down on inflation. Other economists have proposed less direct methods of giving money, from burying caches of cash (to create employment and stimulate investment), to dropping money from helicopters. Sure, those examples were tongue-in-cheek, but you can kill two birds with one stone by using government money to invest in rebuilding infrastructure, building high speed rail, curing cancer and diabetes, paying for more and better public education from pre-K through college. That money pays off in multiple ways: more people have jobs, you stimulate moderate inflation and wage growth, and in the end you have all new infrastructure, new treatments for disease, and a better educated population. Better still, all that money will get spent by all these people with more money and better jobs on buying better housing, newer cars, better food, more luxuries, and that money can make our corporations more profitable and faster-growing...
Yet I fear we are all headed the other direction on these things.
Without inflation, the working class is able to accumulate savings and better their lives. They don't need to put their money at risk in the markets or negotiate raises at work just to keep from falling behind.
Better still, all that money will get spent by all these people with more money and better jobs on buying better housing, newer cars, better food, more luxuries, and that money can make our corporations more profitable and faster-growing...
Maybe, maybe not, but all of these things can definitely be had by having a strong, stable currency that does not lose value.
The "go into debt and then have inflation devalue your debt" system creates a divide between people who are eligible to go into such debts, and people who are unable to and thus see their savings eroded by inflation. It would be much better to have stable consumer prices and to keep debt manageable by maintaining low interest rates.
Yes; their savings maintains its value even if it does not earn interest. Inflation would destroy the value of what they have saved. Perhaps people are not saving as much as they would like because they know that inflation will ruin them, so they spend their money earlier than would be prudent.
We have had significant inflation in the past 10 years; the prices of just about everything at the supermarket have soared upward. That we can buy technology like computers and phones cheaper does not make up for this.
That's a dangerous assumption for someone to make. Better to consider the debt something used to map asset expense to future earnings (like a company maps dept payment & depreciation to expected asset lifetime).
The system in the US is messed up because there is a foolish bias towards home ownership. I'm not saying owning a home is inherently bad (I own one myself, but I paid cash), just that it is assumed to be inherently good, which is not. In fact it remains economically disastrous.
This is a big reason why the productivity numbers aren't as poor as they appear: the number of labor hours required to purchase a shirt or a TV has fallen. You can see that in the massive inflation numbers on labor-intensive industries that haven't been automatable (cf the late Baumol). But when you average them together it looks like productivity hasn't grown as it is denominated in hrs/$