Is Debt A Major Cause Of Inflation?
- Thread starter Liberalman
- Start date
No, its not. Debt has been around as long as there has been a banking system, because that is the primary vehicle banks/lenders have always utilized to make money. Lenders/bankers existed in the Roman Empire, if not farther back. In the middle ages usury was forbidden to Christians, by the Church, which is why some Jewish families became prominent in finances, because someone needed to fill the void and they were looking for a way to make themselves more invaluable and immune from the prejudices of the Christian majority in Europe.
Debt leveraging has increased in popularity with the rise of the middle class, and particularly in the 20th century. Part of the reason for the explosiveness of the 1929 stock market collapse was small investors, going farther into debt than they could handle, and losing everything (or near to it) when the market corrected, and markers on leveraged investments (speculations in most cases) were called in. In the last 50 or so years, with the explosion of consumerism, debt rates have become more exagerated.
As to some moron thinking that debt is the reason for inflation, well, thats Glen Beck logic for ya. Increases in the standards of living cause inflationary pressure but personal debt is not the reason: rising prices in commodities/products are. Now if we reduced our debt loads, our standards of living would probably increase, as we could spend more money on what we want, rather than on servicing our debts, but thats really a choice people have to make for themselves... and it still doesn't make the price of a tank of gas or a side of beef go down.
You do understand that there would still be a cost to deliver this education, right? The money has to come from somewhere.
With no access to debt the houses would be cheaper because the materials to build it would be cheaper and wages would be cheaper.
No access to debt would not mean a higher jobless rate, a person would have more money to spend but it would make the companies more responsible in their hiring practices.
The government should not do anything until they have the money and spend it on the more important things instead of sending it out to other countries to solve their problems. You have to remember that the government takes a percentage from the income so whatever monies they get that’s all they would spend.
Paying bills immediately is OK because you would not have to pay it later.
Payrolls would be met if you change hourly wages to salaries paid daily, weekly, biweekly or monthly so you do not have to pay it hourly as you suggest.
I would prefer to get a daily cash payment like in the old days.
TenPenny with the invention of the computer sale taxes could be paid to the tax account as it is collected from the consumer. When you buy online with a debit card it is taken from your bank account immediately.
There would be a cost of delivering the education and the money would come from your savings account and since the post secondary schools is all about enrolments they would offer the programs at a cheaper rate
The point I am driving at is that the real cost of delivering that education would be marginally cheaper at best.
Supply and demand, just like anything else. If there is a value to it then you make more. If there isn't you don't.
With no debt students will not be able to pay that much so the courses would be more condensed and a degree program would take a shorter time to get.
When you put debt into the equation of education inflation makes it more expensive because of all the student loans.
The institution looks at the student loans as money in the bank so they can spend more money on wages and equipment and charge even more on education.
If the government were to do an audit on all the post secondary institutions most of them would be charged with fraud while a lot of the students would end up with financial hardships
You're making some very broad generalizations here. This equation may easily backfire in that 'debt' acts to increase the money supply which in turn affects both the supply and demand components of the equation.
Limit the money supply and you'll effectively shrink the supply of 'things' while (probably) not decreasing the demand side of things.. What you may see is a functional increase in the cost of living... You'd be taking one helluva chance on hoping that the CPI decreased instead of increasing.
Productivity.
Further, if you have the only $20 on the planet, it's is basically worthless... Why would I want it?
"Rapid deflation" is what had the biggest impact... That and the love affair with using debt to leverage securities.
Without the mandatory courses? Like what? A Bachelor of Science in Biology without Cell Biology? A Bachelor of Commerce without Economics? A Doctor of Medicine without Physiology? A Bachelor of Engineering without Physics? Hippy degrees. Let's all take basket weaving, pottery class, and wonder why we can't get jobs with our Liberal Art degrees...
You make it (Bank of Canada), just like you dig up more gold or build more furniture. If it has value you make more.
If there's only one $20 bill in existence and there are no more being made; that solitary $20 is worthless... It has no value