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Comment by rswail | Hacker News Reader

This entire article is a conflation of two orthogonal arguments:

1. Austrian economics is right, Keynsian is wrong.

2. Central banks are introducing ledger based currencies to increase surveillance of consumers, using the strawman argument about China.

On 1), the pandemic has shown that government spending works to keep an economy from failing. The old inflation argument has been proven completely false. If anything, what has been proven is that a greater distribution of wealth is needed as Amazon and online wholesale and retail take over.

The boom in online sales is a superprofit, driven by a windfall that government public health measures closed other sales channels. Those profits should be subject to a windfall tax to reduce that concentration.

On 2) Central Banks are looking at ledger based currency as a way to allow more distribution channels beyond the existing retail banking network. It allows greater freedom for financial offerings by removing a layer of distribution.

In a way, ledger based currencies are the "Amazon" of money distribution by central banks. It allows them to push money out when needed to multiple outlets, while still maintaining regulatory control.

If anything, it's a "free but regulated market" at work.

View on HN

On 1) How can you say the inflation argument has been proven wrong? Since the financial crisis in 2008 houses in Austria have more than doubled in prices.

I find your arguments very naive. You entirely ignore the misuse of governmental power - history has shown us. Also please consider that increasing the money supply steals money (the value of money) from everyone's checking account over the long term. At the same time consider that QE money is not retrieved by the people who need it most (see cantillon effect).

>houses in Austria have more than doubled in prices

Inflation measures the general price level in the economy (in the form of a basket of goods), not the prices of individual commodities. The inflation in Austria has been at a steady 1-3%[1] over the last decade, roughly in line with inflation targets. Housing prices have risen, like in many other regions, due to a lack of supply of housing in the market, not changes in the money supply.

These vague rants about governmental power are exactly what makes it to read any of these Mises articles with a straight face, it is nothing else but libertarian ideology.

[1]https://www.statista.com/statistics/375291/inflation-rate-in...

>Housing prices have risen, like in many other regions, due to a lack of supply of housing in the market, not changes in the money supply.

Don't you think demand/supply is strongly impacted by the actions taken by the FED or ECB (eg interests - since 2008 it's difficult to find better investment objects than real estate or Gold in order to retain the asset's value - loans are pretty cheap).

>These vague rants about governmental power are exactly what makes it to read any of these Mises articles with a straight face, it is nothing else but libertarian ideology.

Does that mean you are sure the government won't use interest rates as a mean for controlling the economy? Wouldn't you feel very bad when being forced to spend your money in order to not be punished with negative interest rates? Without cash you won't even be able to escape. Negative interest rates are just one example. I'm sure that this is happening if we don't act.

I can't see why you consider such things vague rants.

The supply of housing isn't impacted by monetary policy. If people were free to built, then demand for housing could be satisfied rather than seeing these increases in price. Increases in money supply don't increase prices if output rises, only if more money chases the same amounts of goods. Which again, is not happening as born out by data.

>Does that mean you are sure the government won't use interest rates as a mean for controlling the economy?

The central bank, which acts independently, and not the government, uses interest rates to control the economy, but that's the point. It's a good thing, not a bad thing. If we had the digital currency in question and the central bank can send everyone two thousand bucks during a pandemic induced depression to stabilize demand rather than completely sound policy being held hostage by politics we would all be better off. We are right now literally living through a situation that shows what the benefit of such tools would be.

>If people were free to built, then demand for housing could be satisfied rather than seeing these increases in price. Increases in money supply don't increase prices if output rises, only if more money chases the same amounts of goods.

But that's the problem: housing isn't like most goods (eg. TVs) that can be produced in a factory in quantities so massive that everyone can have one. The same can't be said of housing, or more specifically land eg. there's only so many space for a semi-detached house within 30 minutes driving distance of the bay area.

> Which again, is not happening as born out by data.

Source?

> increasing the money supply steals money (the value of money) from everyone's checking account over the long term.

It's worse than that.

If inflation was uniform and instantaneous, expanding the money supply would just result in a corresponding change in all prices and account balances. It'd be like trying to redefine the litre in order to get more gas from the pump. As such, the state wouldn't bother trying to change it.

Inflation "works" insofar as it allows those who receive the new money earlier to buy goods before the suppliers realize their prices are too low for the new money supply, and in so doing drive up the prices faced by those who receive the new money later. The aggregate effect is to transfer money from those who receive the money last to those that receive it first (banks, financial institutions, forex, etc.)

You know that all the central banks are actually saying themselves they want to track? It's not even a secret, you can read it right on their websites. The EU bank and Commission use China as the example, check it out: https://www.europarl.europa.eu/RegData/etudes/STUD/2020/6487...

I am not sure where in the 47 pages you are reading that, I can find that the report is reccomending a european internet like the chinese to have higher growth in EU, and to foster european values "such as democratic values, data protection, data accessibility, transparency and user friendliness." Which I see rather pependicular to what you are saying it is telling. It should also be said that this report is not made by the european union, but for the european union by a 3rd party that got paid to make research for them. What it says, may or may not be influential to the future decicions of the EU.

> I am not sure where in the 47 pages you are reading that

From the document: "An added benefit of the increase in electronic payments is the reduction of shadow economy. Each year trillions of Euro flow in the shadow market unregulated and untaxed, leading to long term deficits. Traceability of electronic payments is much better than with cash, leading to more information on the flow of money. This information can be used to reduce tax evasion and make regulation easier, in turn reducing the shadow economy"

> It should also be said that this report is not made by the european union, but for the european union by a 3rd party that got paid to make research for them.

Signature right on the front page: "Policy Department for Economic, Scientific and Quality of Life Policies Directorate-General for Internal Policies."

This "third-party document" shit is a really embarrassing excuse. Can't the EU apologists think of something better?

Maybe someone external cooperated on that document - but it's still a document by the EU and for the EU just like any other, authored and published by a department of the Directorate-General for Internal Policies of the EU. I am sure they wouldn't have signed and published it if they disagreed with the content (or at least would have said so). You wouldn't try to claim that a law/regulation written by an external lawyer and published by the EU is actually not an EU document, right? Because there is a lot of that, e.g. the GDPR.

From the document: "The study lays out predictions for digital services in the next one to ten years and provides recommendations for action for the European Parliament in preparation for the Digital Services Act. This document was provided by the Policy Department for Economic, Scientific and Quality of Life Policies at the request of the committee on the Internal Market and Consumer Protection."

Anyways, this document is one of many, it's just the first I had a link to. The same points (and other, even more concerning ones) are made in many more.

> "such as democratic values, data protection, data accessibility, transparency and user friendliness."

Sure, just like the encryption backdoors are for the children, for the democracy and especially for transparency. Take these democratic values with you, I am not interested. The EU is really efficient in showing us why is democracy wrong.

> From the document: "An added benefit of the increase in electronic payments is the reduction of shadow economy. Each year trillions of Euro flow in the shadow market unregulated and untaxed, leading to long term deficits. Traceability of electronic payments is much better than with cash, leading to more information on the flow of money. This information can be used to reduce tax evasion and make regulation easier, in turn reducing the shadow economy"

That is an observation, not a policy thought up by politicians working at the Parliment.

>This "third-party document" shit is a really embarrassing excuse. Can't the EU apologists think of something better?

It is a study for politicians to take better decicions not policies to be implemented, for that you want to read the things like the meeting minutes not supporting analysis.

>Anyways, this document is one of many, it's just the first I had a link to. The same points (and other, even more concerning ones) are made in many more.

I would welcome linking to more, as long as they are not just studies, although interesting reading they do not dictate the policy.

>Sure, just like the encryption backdoors are for the children, for the democracy and especially for transparency. Take these democratic values with you, I am not interested. The EU is really efficient in showing us why is democracy wrong.

Well I am also welcoming more information about this as it sounds like something I want to read up on. The EU may be inefficient, and it could be a lot better, which is why I would welcome a discussion about it instead of making accusations without providing any sources to base your claims on.

> That is an observation, not a policy thought up by politicians working at the Parliment.

Once more, the document says: "The study lays out predictions for digital services in the next one to ten years and provides recommendations for action for the European Parliament in preparation for the Digital Services Act."

> It is a study for politicians to take better decicions not policies to be implemented, for that you want to read the things like the meeting minutes not supporting analysis.

Exactly! And they really took all of this very concerning advice to their hearts with the Digital Services Act.

> I would welcome linking to more, as long as they are not just studies, although interesting reading they do not dictate the policy.

Start here: https://ec.europa.eu/digital-single-market/en/digital-servic...

> Well I am also welcoming more information about this as it sounds like something I want to read up on. The EU may be inefficient, and it could be a lot better, which is why I would welcome a discussion about it instead of making accusations without providing any sources to base your claims on.

Are you not watching the news? Even if not you could have easily used Google yourself, the document I linked gives more than enough keywords.

We're very lucky the EU is inefficient, otherwise there would be a totalitarian police state way worse than China or Russia sooner than tomorrow. Fortunately we got enough time to leave before the EU makes its latest moves.

No discussion is going to save this shit show, we're way past that. The DSA is going to be implemented soon and it's not going to be even a tiny bit better regardless of how much you talk about democratic values.

Sadly it can't be better. This union is not striving for freedom but the opposite.

For #2, what is the actual technical hurdle to more widespread distribution? I saw an idea that every citizen should just automatically have a checking account at their regional Fed. Why not that? It does not seem technically infeasible, and the fed could then do distribution by debiting their own accounts.

It is fun to speculate about this, because money is fundamentally information - imagine that a dollar is a "like".

The most fundamental hurtle to distribution is that people don't wanna! When you have a bunch of likes, giving them away sounds like a good idea, but in reality it means a) reducing your own value (unfairly), and b) increasing someone else's value (unfairly).

I personally have another solution, that I've never heard articulated, which I call "The Enough Number". It's a number you individually decide is enough for you, after which you will choose not to work any further (at least, not for money). This achieves a kind of de facto redistribution since, theoretically, someone else will step in to make the money the retiree is no longer making. Another way to put it is that it creates an artificial scarcity of competence, or it means that competence-for-hire decays over time in a way that is beneficial to society.

The only way for this to work, IMHO, is if you get some social status at Davos (free VIP entry for life? A medal?) for having a achieved Enough. Or maybe a publisher can arise, called "Enough Press" where such people can get a book deal.

FWIW my own Enough Number is $10M. This is still quite high but it reflects my upper-middle class sensibilities. This would be enough for a beautiful 1500 ft^2 house in Laguna Beach, a 30' wooden sailboat I partner on with a couple of neighbors, and I'd probably spend my time teaching neighborhood kids how to program and make things in a beautiful, sunny space filled with all kinds of very cool and dangerous components.

Politically, this helps focus me on the desired outcome, where the Earth is populated by people who routinely achieve Enough at 30, and spend most of their lives raising their kids, traveling, telling stories, eating good food, reading and writing. The really duty driven folk would find longer-term work at the EPA or the Justice Department or on space projects, etc. I would expect intellectuals to have the easiest time of it, because they could become adjunct professors. Celebrities and business people would struggle, I think, because the attention is the juice, and you can't every really have Enough!

My Enough Number is 10% + (the highest enough number of everyone else). Just so I can keep enough for me and my generations.

Does it really serve your future generations to give them enough so they never have to work?

From what little I've seen it can just as often amplify their own destruction or bad habits.

(or) protect them under maybe a calamitous future.

Sure but what if your actions to protect them from a calamitous future actively result in that future happening?

The number of disasters that are a) small enough not to wipe us all out, b) large enough that it would wipe out a large fraction of us, and c) a large amount of money would have any influence being in one group or another, is very small, and they would be mostly political (possibly biological) disasters.

I mean, I could think of stranger stories than a humanity that was saved from total destruction by the actions of a few "crazy" billionaires that got together to make a livable moon base "just in case" in 2021, just before The Real Plague, a virulent strain of Covid-19, created a zombie apocolypse that almost wiped us out - except for the intrepid crew of Atlas-1 Moonbase, populated by the best of humanity: Bezos, Gates, Musk, Myrhvold, Trump, and a good chunk of the Saudi royal family. Or that was the plan, anyway, before the Chinese finally activated their APT and, at the last minute, replaced the passengers with CCP leaders and their families. (Satire aside, if humanity could "come back" from this unlikely scenario, then I'd say the excesses of the 20th and 21st century might even have been worth it. But really, the odds of any of this happening seem vanishingly small.

This wouldn’t work at all, and in fact would do opposite to what you want.

You are trying to solve the problem of scarcity. This scarcity manifests in people having not enough. And I’m not taking about your Enough, I’m talking about people having to think about how much mortgage they can afford, whether to buy groceries at Whole Foods, Safeway or Walmart, or whether they can make payment on their car. All of this happens because we don’t have unlimited abundance of everything, and we need to determine how products and services that are produced get distributed.

For this purpose, we use money , and the way it works is people can make money by various activities that almost always provide products and services that other people value, and they give you money in exchange. This can be entrepreneurship, but for most people it’s a job one does for wages.

Some jobs pay little, some pay a lot, and it seems that your idea is that there are not enough high paying jobs around, and so you want to increase availability of these jobs by having people working these jobs give them up early.

This is a well meaning, but terrible idea. The problem here is that its result is less things get produced, so in aggregate, we’re even less wealthy than before your plan. Your plan is strictly negative for the society. It might benefit some people who get to have a better job than they otherwise would, but the society is paying immense cost for this job.

A better alternative than destroys less (though still significant amount) value is to just tax the high earners and use the proceeds to subsidize low earners. This way, you can have low earners earn as much as they would have after switching to higher paying job in your “retire early when you have Enough”, but you’d have both high and low earner continue working, so more total value would be produced.

>> A better alternative than destroys less (though still significant amount) value is to just tax the high earners and use the proceeds to subsidize low earners. This way, you can have low earners earn as much as they would have after switching to higher paying job in your “retire early when you have Enough”, but you’d have both high and low earner continue working, so more total value would be produced.

In this better alternative why would high earners continue to earn high when they can just switch to become a low earner and eat the tax from the remaining high earners.

Yes, they could do that, which is why income taxes also destroy value. They’re just not as bad as directly incentivizing people to stop working altogether.

Most people will never get to their Enough number, so your point is moot. That is, even if by some miracle Enough caught on, and people did it, talked about it, and acted on it, not much would change except, at first, there would be a wave of retirements that, presumably, would open up positions for younger folks in the industry.

The reason you're wrong is that high earners are usually not actively producing things. The business leaders are making allocation decisions, which are removed from production by 2-5 levels of indirection.

Or, another way to look at it. All the good advice about growing rich talk about "passive income". That is, by definition, income you make despite not doing anything. The economy suffers not at all if such a person decides to do...anything with that money (other than consume it).

> The reason you're wrong is that high earners are usually not actively producing things.

I don’t know what background you are coming from, but rest assured that most high earners do produce significant value. Lawyers, doctors, software engineers, architects, the list could go on an on. To be sure, some people might make money in zero sum activities, and some might exploit information asymmetries to charge significantly more than their services would be worth in perfect information scenarios. But, by and large, high earners (defined as, say, top 5% of wage workers) most definitely do provide value, in excess of what they are actually paid. It is simply hard for millions of people to convince others to give them more money than they services are worth.

> Or, another way to look at it. (...)

I don’t actually understand your argument in this sections. Most good advice on getting rich is not focusing on “passive income”. Instead, it focuses on investment and on providing value by entrepreneurship. People talking about “passive income” usually mean by it a kind of investment that produces returns with little to no labor input required. Given the low cost of capital today, such investments don’t usually provide high returns, and so are highly unlikely to make one rich. They can provide nice income, to be sure, but that requires becoming rich in the first place.

>Most good advice on getting rich is not focusing on “passive income”.

I have to conclude you aren't arguing in good faith.

A major gap is that while we can reason consciously as individuals about the values of goods and services, as an society/economy we price things unconsciously.

There are many jobs that have well agreed upon social value but we have no way to wire up the economy to pay them commensurately. Think of caregivers being paid $9 per hour to clean up Grandpa's sick, or teachers who can't spend their summers on improving their craft because they have to take a menial off-season position to stay afloat.

It also works on the other side-- I think you'd be hard pressed to find someone saying that top athletes and actors are worth eight figures a year on their contribution to society alone, but the market has bid them there.

A much more hands-on system of wage and price controls could at least come from a conscious decision-making process.

> money is fundamentally information

No, prices are information. Money is a unit of measure. Fucking around with money results in misinformation.

Regarding technical feasibility: I don't think the Fed has a system ready that could handle the amount of transactions and record keeping necessary for a system which is accessible to the public. They would need to buy such a system. But more importantly so called narrow banks are not in the interest of regulators and the current financial system. If customers could directly deposit at the Fed they would likely disintermediate regular banks (which leads to a bank run) and prevent them from doing their central function in the financial system (issuing credit). You would have to rethink the financial system and regulators are wary of such big changes. Matt Levine has a great article about it: https://www.bloomberg.com/opinion/articles/2019-03-08/the-fe...

Ah right, ha, that Matt Levine article is where I first saw this idea.

My point actually wasn't that this is a good idea, but that it's a superior idea to doing the same thing with a blockchain based ledger. All the problems you outline are true for the blockchain solution as well.

1. is not settled yet. we are yet to see how all this spending is going to be paid for.

I assume like it always has been, with a reduction in value of the currency relative to assets.

Isn’t that... inflation

Sadly, not directly. Assets inflation != Inflation

>> Assets inflation != Inflation why?

Because the Fed measures inflation by CPI. The price of gas and groceries. Nothing makes for a more unstable economy than a working class who can't afford food and mobility.

Ah, so the Fed does not measure house price rises, mortgage payment increases as inflation. if a person becomes homeless as they can't afford shelter there is still no inflation as per CPI.

Owners equivalent rent is included in CPI:

https://www.bls.gov/opub/hom/cpi/

I can’t speak as to how accurate it is compared to real life.

What I know is CPI figures don’t and can’t incorporate volatility. For example, I assume healthcare expenses will skyrocket, and government assistance such as Social Security will be reduced. Therefore, I act as if life will be more and more expensive.

Yes, I think that was their point.

Negative interest rates?

Looks like essentials like food and shelter are rapidly outpacing the lower class' ability to pay for them. So my guess is food stamps and housing stipends will grow as wealth concentrates into the hands of those who own/produce them.

Isn't it just shelter, healthcare, and education? Or has food prices increased as well?

At least where I am in the Midwestern US food prices of staples and produce are almost 200% where they were in late 2019

Across all food items, or specific ones? According to the BLS CPI report for the Chicago area[1], food prices has only increased 5% in the past year. If you drill down to the specific food categories on page 5, none of the food categories are anywhere close to 200% figure you claimed.

[1] https://www.bls.gov/regions/midwest/news-release/2020/pdf/co...

Just my anecdote - I usually shop at Kroger owned stores (various brand names depending on your region of the US). Their "normal" prices are about the same as any other non-discount grocer like Safeway, but they're very aggressive with large discounts for store "members" who use their tracking card.

For example, when I shop, I'm not that particular to specific brands, so if I'm buying soup or cereal, I will always choose the one that is on sale that week, usually around half price (e.g B1G1). I end up paying about 60% of what a normal customer pays who is loyal to specific brands no matter if they're on sale or not.

What I've noticed is that the normal prices haven't really gone up all that much, but the discounts are very small and there are far fewer of the really good ones (e.g. $3 per lb. of chicken, the $0.99 carton of eggs, half price cheese, B1G1 soups, etc).

Thus, I'd say my grocery bill has gone up about 50% or more in just the last year, whereas it had really held stead for the last decade.

This is, of course, on top of home prices in my area nearly doubling in 10 years when considering increased taxes, HOAs, repair costs, etc.

The Austrian answer to such a crisis has been tried early in the 20th century after the Great Depression. Spending was reduced but the government was still running a balanced budget. "Outright leave-it-alone liquidationism was a common position, and was universally held by Austrian School economists." [1] Mainstream consensus is that if the Fed had expanded their balance sheet immediately and government had reduced taxes and increased spending the crisis would have been much less severe - but this only started when WWII broke out and the war had to be financed.

[1]: https://en.wikipedia.org/wiki/Great_Depression#cite_ref-Rand...

The depression and the “Austrian” response implemented are vastly oversimplifying it. For starters the widespread tariffs and outright ban and seizure of gold should tell you this is not what an Austrian would do.

You pointing out two policy measures which are not according to the Austrian school doesn't invalidate the argument that the response was Austrian rather than Keynesian. The seizure of Gold was to prevent a further contraction in credit because the dollar was still on a gold standard. I'm not defending gold confiscations (nor am I in favor of a gold standard) but without this measure the crisis would likely have been even worse. The tariffs were politically motivated (to strengthen American manufacturers - neither Keynesian nor Austrian) and intended to stoke inflation.

Not sure where Austrian is implied?

Are you saying there is nothing to be paid by current and future generations for this.? The system will take care of itself somehow?

Depends, if the central bank can keep to inflate its balance sheet and absorb most of the additional debt of corporations and the public without creating inflation then nobody will actually have to pay. If there is inflation then that means the purchasing power of savers (ppl with bonds as their main asset) will be reduced (ie. savers will pay).

>> Depends, if the central bank can keep to inflate its balance sheet and absorb most of the additional debt of corporations and the public without creating inflation then nobody will actually have to pay

Just wondering how is it possible for them to do this without raising inflation. Simply allocating all the debt on their balance sheet means they have erased the debts of the corps/public by increasing the money circulation isn't it? Then inflation will happen?

So far it hasn't because the additional money has remained in financial markets and just lead to higher valuations (lower yields, higher share prices, startup valuations and housing prices). It hasn't really lead to increased spending via the wealth effect - which would be required for actual inflation.

Right now many central banks and countries, especially the US are actually exercising a third economic philosophy: monetarism (which the federal reserve board members are historically staunch supporters of)[1].

1. https://www.clevelandfed.org/en/newsroom-and-events/speeches...

On 1: I think the final judgment is yet to be made. We don’t know how many businesses will keep going for how long and if there is just a delay in bankruptcies.

Also, inflation in consumer goods can show delayed as well. And assets are already inflated. It’s a bit too early to say with confidence, that the stimulus prevented the economy from failing.

> 1. Austrian economics is right, Keynsian is wrong.

At this point in history, how can anyone claim that Keynesianism is "wrong"?

> I would summarize the Keynesian view in terms of four points:

> 1. Economies sometimes produce much less than they could, and employ many fewer workers than they should, because there just isn’t enough spending. Such episodes can happen for a variety of reasons; the question is how to respond.

> 2. There are normally forces that tend to push the economy back toward full employment. But they work slowly; a hands-off policy toward depressed economies means accepting a long, unnecessary period of pain.

> 3. It is often possible to drastically shorten this period of pain and greatly reduce the human and financial losses by “printing money”, using the central bank’s power of currency creation to push interest rates down.

> 4. Sometimes, however, monetary policy loses its effectiveness, especially when rates are close to zero. In that case temporary deficit spending can provide a useful boost. And conversely, fiscal austerity in a depressed economy imposes large economic losses.

* https://krugman.blogs.nytimes.com/2015/09/15/keynesianism-ex...

I'm sure that there are nuances in the model that can be more or less accurate, but the idea that (aggregate) demand drives economic activity, and that (central bank) interest rates and government (stimulus) spending effects economic activity seems fairly certain. Especially with everything we've seen over the last ~20 years: Fed-driven US real estate bubble, post-2008 economic recovery, lack of inflation due to low/zero rates even with lots of "printing money", austerity caused economic slowdowns (in the EU).

It's been one giant economics petri dish of experiments. How has Keynesianism failed? Non-K folks were predicting all sorts of problem, and yet the Ks were saying 'it'll be fine':

> We believe the Federal Reserve's large-scale asset purchase plan (so-called "quantitative easing") should be reconsidered and discontinued. We do not believe such a plan is necessary or advisable under current circumstances. The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed's objective of promoting employment.

* https://economics21.org/html/open-letter-ben-bernanke-287.ht...

Like most of Krugman's blogs, he's over-simplifying for a mass audience.

Full-employment is very easy to achieve for the government, if that is the government's only goal. Create artificial demand for ditches to be dug, and then hire people to dig those ditches. The fundamental question is not how to generate artificial demand, but how to generate artificial demand that succeeds at generating useful value.

Now, that spectrum has a range of answers. Sometimes you don't really care about value, or you take value on faith, e.g. when constructing public infrastructure works. They put people to work, get people spending, and everyone agrees that the country is in dire need of infrastructure improvements right now. There are, however, two non-infrastructure extremes: a) spending money on strong companies that will become stronger (instead of failing due to temporary unavoidable circumstances), but if anyone knew for sure which companies these were, the government wouldn't need to spend any money at all, investors would step in and pocket the profits. Then there's b) spending money on weak companies that would've failed in a year or two anyway, and emergency bailouts only forestalls the inevitable, wasting money and time and creative potential for nothing.

Now most companies are on a spectrum, which means that the strategy of such wide-spectrum spending is to offset the losses of boosting weak companies with the gains made by strong companies, overall.

Will it work at generating (net) useful value? Maybe. If so, then the currency is tied up in the extra value generated, and we'll avoid inflation. If not, then we have far more currency in circulation for the same amount of value, and prices will go up in tandem. Jury's still out.

> Full-employment is very easy to achieve for the government, if that is the government's only goal.

This is a bit black-and-white: full employment may not be the end-goal of stimulus spending and the government generally, but rather simply just getting the ball rolling. Pre-pandemic there wasn't much need of stimulus, and certainly no need of the December 2017 tax cut (TCJA) that was supposed to "pay for itself" per its proponents, given the state of the economy and unemployment rate:

* https://fred.stlouisfed.org/series/UNRATE

Now that isn't the only measure of 'success', but if the unemployment rate is (say) >8%, then spending money on 'non-useful value' work, so that people can pay rent and buy food, isn't such a bad thing in the short-term (IMHO).

Some certainly argue for full-employment all the time, but that's a separate discussion than the general idea of raising aggregate demand to 'induce' economic activity.

> Now, that spectrum has a range of answers. Sometimes you don't really care about value, or you take value on faith, e.g. when constructing public infrastructure works. They put people to work, get people spending, and everyone agrees that the country is in dire need of infrastructure improvements right now.

Yeah:

* https://www.npr.org/2018/05/15/611389675/why-its-infrastruct...

* https://www.theverge.com/2020/3/10/21173209/infrastructure-w...

* https://www.infrastructurereportcard.org

lack of inflation due to a flawed definition of inflation.

What is the current "flawed" definition, and what would be a 'non-flawed' definition?

Giving people money for nothing is not providing value for effort. This is doomed to fail. Every single extra dollar printed is pure inflation rather than wealth creation. All of the things people really want inflate while marginal crappy goods decline in quality and remain affordable. Housing, quality education, childcare, high quality food (think Whole Foods), good clothing and shoes - all of this stuff gets more expensive. If a UBI is ever implemented we will have a vast underclass of people barely surviving despite their “free money” and the wealthy will continue to get ever wealthier.

> If a UBI is ever implemented we will have a vast underclass of people barely surviving despite their “free money” and the wealthy will continue to get ever wealthier.

That’s why there would need to be a wealth/income tax to redistribute in order to provide the UBI in the first place.

Isn't that communism?

I don’t know enough about various -isms, but I would posit there is some space between “redistributing all wealth and no individual benefits” and “every man for himself”.

Lol this is your brain on compsci vocational training.

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