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Comment by toomuchtodo | Hacker News Reader

Everyone will be dead by then. See Bank of Japan, or Europe and negative interest rate policy.

We can print tens of trillions and still not see inflation, if we control the costs of healthcare and education. One should not think about nation state budgets like a household budget. We’ve already spent $2 trillion on the first stimulus salvo in the US, and discussions for the next round are already taking place. The Federal Reserve has committed to “unlimited support”, so the decision has already been made; we’re just haggling over how it’s going to be spent at this point.

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Everyone of us might be dead in the next 30-50 years, but the coming generation will bear the fiscal burden of this profligacy (either implicitly through inflation or through a currency devaluation).

If so much money is printed (& spent) and (real economic) inflation is not seen, the logical implication is: a) The wealthy absorbed the domestic money in (real) asset price inflation (hence lower yields and higher wealth inequality). b) The money was "exported" out of the country to purchase foreign goods and services (leaving an interest rate burden that will eventually suck the "real" tax budget dry).

The petrodollar will keep the USD strong no matter how much "money printing" is done. The money "exported" to purchase goods represents the value that America gets to extract from the world from it's hegemony. We'll be fine.

Do you mind explaining "We can print tens of trillions and still not see inflation, if we control the costs of healthcare and education."?

Happy to. If you have inelastic demand for something, the cost will rise to consume all available dollars. Educational costs rise faster than inflation because the federal government hands out loans that you can’t default on. Healthcare costs rise because you have no alternative to health insurance premiums, copays, and deductibles except going without (to great peril). You need a degree to check a box for employment, you need healthcare to not die. The money your central bank prints is then consumed inefficiently.

Looking at other goods and services, there’s only so much food, energy, clothing, and so on you can consume. Additional dollars beyond a certain point provide diminishing marginal utility. Bill Gates doesn’t order tractor trailers worth of food; he requires roughly the same amount of calories as you do.

So! Due to the transition to a services based economy, the US economy slowly but surely moving away from oil needed for growth (over the last 15 years), global demand for dollars, and structural demographic changes (an older population consumes less of everything except healthcare), we can print fiat without issue with some cost controls around inelastic needs.

> Do you mind explaining "We can print tens of trillions and still not see inflation, if we control the costs of healthcare and education."?

At a high level, there are only a few productive economies in the world: USA, Germany, and to a lesser extent Japan and S. Korea.

The rest of the world consists of countries that are either small, subsistence farmers or welfare states.

So the USA can basically do whatever it wants monetarily. It also helps that it's the only global currency. You can go to the farthest ends of the earth, and people hoard US dollars there.

You can print money because US dollar is used as in international exchange. Oil prices are in USD. Basically, printing money will transfer the economic burden to all others.

If third parties start using other currencies, printing money won't help.

We didn’t spend $2T last time; they were loans, repaid with interest.

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