Think about it. You're tired of your job and interested in making a change. It's, say, August. You know that if you wait until the end of January you'll get your annual cash bonus, say, $30K. Also, between August and the end of January you get a few stock vesting periods which amounts to, say, another $50K. So you can leave now, or you can stick it out for a few more months and get $80K to help smooth your transition.
What do you think you'd do? If you're the sort who doesn't need money and only works for the challenge and the chance to contribute to something important, you would probably just leave. If your paychecks actually matter to you, the $80K (plus whatever your salary is during the interval), will probably make you decide that waiting a bit is a good idea.
Inflation doesn't decrease your purchasing power unless you're living on a fixed, non inflation-adjusted income, or from a limited pool of wealth which you keep in cash.
If you're doing productive work, you can expect your wages to keep pace with inflation, and if they're not, it's very likely that without inflation you'd be seeing wage cuts; your relative value as a worker is independent of inflation. If you're living off of stored wealth, you need to store it in the form of goods, not cash. Real estate, stocks, etc.
There are advantages to inflation. One is that it encourages people to keep their wealth invested in production (aside: This is also part of the economic value proposition for property taxes, which discourage non-productive land-hoarding). Another is that it discounts debt. Because debt payments are not inflation-adjusted and wages effectively are, making your payments gets easier over time. This isn't a good in and of itself, but it's a good when considered against the alternative possibility of deflation, which tends to create insolvency among borrowers. Of course, inflation can harm creditors who don't factor it into their interest rate, but this is less harmful to the economy as a whole.
The ideal would be a money supply that exactly kept pace with growth in production resulting in neither inflation nor deflation. But that's hard. Because mild inflation is not particularly harmful, and deflation is really bad, policymakers prefer to aim for mild inflation as a hedge against deflation.
>> There are advantages to inflation. One is that it encourages people to keep their wealth invested in production
That's not an advantage. Inflation does punish saving (which is bad to begin with), but also encourages risky investments. The higher the inflation, the higher the return on investments you need to not lose wealth, and the riskier your investments, the more likely you're to lose them.
So no, that's not good. Purchasing power increases are good.
>> Another is that it discounts debt.
Yes, this is why governments keep lying to us that inflation is good for us. They're trying to manage their massive debts, but they'll ultimately fail.
How about just not using money you don't have, or money you can't afford to borrow? Oh but that would curtail politicians' crony-capitalist spending, so we can't have that.
>> The ideal would be a money supply that exactly kept pace with growth in production resulting in neither inflation nor deflation
You're basically suggesting that our purchasing power should not increase. That's just absurd.
>> Because mild inflation is not particularly harmful
So even you acknowledge that it is harmful, even if not to a large extent. But what do you get if there's 2% inflation for 10 years? It keeps compounding you know. How much of your purchasing power will you have lost by then?
>> deflation is really bad
No it's not. It's your purchasing power increasing. Everyone wants to get more for less, and that's what (price-)deflation means.
No need to take his word for it. If you look at the Austrian school theories you'll see that those things aren't accounted for. Another crucial element that isn't considered is velocity of money, and the concomitant effects on money supply. The Austrian school has a lot of important insights, but it omits several important factors. It has a good and useful set of ideas, but it's not the grand unified theory of economics that many libertarians (like me) wish it were.
Well, I just responded to your other post, where you were economically confused :)
Velocity of money? Concomitant effects, huh? .. I suspect you might be some sort of government shill though. Very few actual Libertarians don't see Austrian economics for the rational truth it is.
I doubt it. We're very flexible omnivores, and have acquired the capability to create supplements for whatever specific nutrients we lack.
The impact would be to the variety and tastiness of the food we have available, but I doubt it would significantly impact our ability to feed the population, or the health of that population. Oh, I'm sure that good access to fruits and nuts does make us healthier than we'd be without it, but it's a matter of small degrees, not life or death.
I interviewed in late 2010 and was hired in early 2011. I had a great experience. Other than the long delay between interview and offer, of course. It may be relevant that I didn't interview in MTV.
The purpose of Google Fiber isn't to make Google the world's ISP, it's partly to demonstrate the feasibility of fiber to the home (in a big, public way) and partly to create demand (by being big and public).
Yes, it's more about hype and politics than installation. I thought that was obvious. If the hype and politics doesn't get the big ISPs off the dime, then it may have to become about installation, in which case the experience Google Fiber is obtaining will become important.
