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Comment by dllthomas | Hacker News Reader

Economies are made up of individuals; they aren't themselves individuals. Unless you think that there was a rash of major medical issues in 2009, I'm not sure how your experience is relevant or why you think it generalizes.

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My experience here does not have to "generalize" and isn't really meant to. More like an attempt to give a concrete example on a small scale that perhaps people can relate to more readily.

When Europe sent people to "The New World" and tons of silver was shipped back to Europe, the result was ridiculous inflation. Historically, when you inject more money into an economy but not more goods and services, not more intelligence, not more real value, the result is inflation. Prices go up because there is more money but not more stuff to buy with it.

I don't know how help you understand how ridiculous this idea is if you think dismissing my personal experience somehow proves my point wrong. It doesn't. The point can be made other ways. I just happen frequently speak from firsthand personal experience in part because it was part of the culture of a very respected list I once belonged to where the standard was 1) speak from firsthand experience or 2) cite your sources.

The USA has just had a period of quantitative easing, which injected a load of newly made up money into the economy. The inflation rate is about 1.5% after doing this. If you are going to predict massive inflation from increasing the money supply, where is it? It should surely be here by now.

It hasn't? Check the price of milk. Check the price of beef. Compare the price per ounce of packaged food in 2008 vs. today. Compare the price of anything that isn't included in the "official" numbers for inflation and you see a much different story about inflation.

Put another way, it used to be a mystery: "Why do hotdogs come in packages of 10 and buns in packages of 8?" now you should be asking "Why do hotdogs come in packages of 8 and I still pay the same amount as 10?"

http://www.fao.org/worldfoodsituation/foodpricesindex/en/?_=...

Your claims do not reflect my personal experience, and do not seem to be very well substantiated.

Thats a bad argument, because food products are heavily dependent on the price of fuel, and that has gone up because of: geopolitical instability, limited supply, and explosive demand in developing countries. QE didn't cause increasing demand for oil in China. The price of food and fuel would have gone up relative to other things regardless. Inflation from an increase in money supply will manifest in a way that cuts across industry sectors. Cars, computers, and personal services would be getting more expensive. They're not.

Look at the price of BMW's U.S. entry level 3 series. In 2004 it was $28k MSRP. BLS estimate for 2014 using official inflation is $35k MSRP. Actual is $38k MSRP (under 2.5 percent) for what is for various reasons a lot more car (50 more horsepower, bigger, safer, more fuel efficient). If it weren't for tighter emissions requirements since 2004, inflation in the price of cars would probably be below the general inflation rate.

Or at least computers would be getting cheaper more slowly...

Look, the thing is that if you massively increased the money supply as a percentage of the overall money in circulation, without any corresponding rise in productivity and population, then sure, you are going to have a bad day.

However, this does not mean that any increase in the money supply will have negative consequences. For instance, if you do not increase the money supply at all and the output and population increase, then you have major problems as well.

In this case we are talking about levels that are easily absorbed by the economy, which is not equivalent to an economy that uses silver for coinage finding more silver than they have in circulation.

Speaking from firsthand experience is well and good, but the experience should have some bearing on the issue at hand. You presented it in support of your position when it has literally nothing to do with it - that's what I was objecting to. Your other points are relevant, and I wasn't speaking to them - though they've been well addressed elsewhere I think.

Given that the U.S has one of the highest total health care expenses in the world,* I suspect that a lot of Americans are ill and we are handling it wrong and that is, in fact, one of the things very wrong with the economy. Sorry if you think that is irrelevant. I don't.

* http://data.worldbank.org/indicator/SH.XPD.TOTL.ZS

I think that's entirely irrelevant to the difference between 2007 and 2010. I don't imagine any single plan would fix every issue the US faces, but I think an appropriately sized basic income (as I've said elsewhere, I expect $2000/mo is way too much) would help address a few of them.

> More like an attempt to give a concrete example on a small scale that perhaps people can relate to more readily.

This style of reasoning by anecdote is the problem with public debate, it's an appeal to emotion rather than reason. It's really not useful. Statistics are useful, anecdotes are not.

https://news.ycombinator.com/item?id=7337079

Whatever, your reply addressed neither his nor my post.

You work under the assumption that there will be no gains in goods and services or intelligence or value. But that's the exact same gamble that Ycombinator and other investors take. They inject capital to give a fledgling company a chance. Some make it and some don't. But in the end there has been new value and services added. Similarly, if a drug addict can kill an addiction. Or if a new mother can spend time raising her family, rather than a gang raising it. Or a young person can afford college without having to get crushed with student debt. Or a man can get a new suit of clothes and a laptop to get a better job. Then these things all go a long way to creating new value that wasn't there before. People think of value as cash money. But it's not. Money as has been said is just a proxy for value. But it's not the only one.

Ycombinator hardly "gives money away for free." They carefully hand pick people whom they invest in. There is a contract which states Ycombinator gets a cut of the business. These are people who apply, who have skills and a business plan, etc. It is not like Paul Graham grabs random people off the street says "Here's $20,000. If you happen to make a successful business with that, I want a cut!"

If you do not see the vast difference between the kind of careful investment made by Ycombinator and simply handing everyone money who happens to be a U.S. citizen, I don't know how to go forward with this discussion.

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