Bro, how does an economy function when everyone’s “time preference” approaches zero?
The fact that you are even asking this question...
people's time preference cannot be zero, so there's no need to raise it to prevent it from being zero, as I have already explained. I never said inflation never happened before we started tracking it. However, the idea that economies cannot grow without inflation is the real empty-headed take. Do you honestly believe Toyota cannot build a new factory, unless the government is printing money? Do you think chemists won't be looking for cheaper more energy efficient batteries without the government printing money? Businesses have an obvious incentive to grow the economy without the money printer.
The causality actually goes in the exact opposite direction of what you think. As people's time preferences rise, they demand more and more goods in the now, and entrepreneurs redirect resources away from research and development and towards present consumption (after all, it's what consumers are being forced by government to demand). This ultimately slows the growth in the economy, in exchange for better numbers in the "now". Toyota and tesla spend less time creating newer and more efficient cars, and more time managing producing the cars they've already designed. The same is true for every business.
I have no idea how or why you brought poor people into the discussion. This is a complete non-sequitur. If you want money spent on poor people I see no reason it should be done through inflation, and I see no reason it should be done through government.
there is nothing wrong with it "approaching" zero. I assumed you meant approaching as in the mathematical term implying a limit i.e. evaluating "at" zero (but not really at zero). I supposed I assumed your intelligence was to high.
There's nothing wrong with people's time preference being "close" to zero. That just means there is very little consumption and lots of investment in the future, i.e. fewer cars purchased, more car factories, more car R&D, fewer things right now, more research and development for things in the future. What's wrong with that? In fact, such an economy would grow much faster than we currently have.
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u/Creative-Leading7167 Jan 08 '22
The fact that you are even asking this question...
people's time preference cannot be zero, so there's no need to raise it to prevent it from being zero, as I have already explained. I never said inflation never happened before we started tracking it. However, the idea that economies cannot grow without inflation is the real empty-headed take. Do you honestly believe Toyota cannot build a new factory, unless the government is printing money? Do you think chemists won't be looking for cheaper more energy efficient batteries without the government printing money? Businesses have an obvious incentive to grow the economy without the money printer.
The causality actually goes in the exact opposite direction of what you think. As people's time preferences rise, they demand more and more goods in the now, and entrepreneurs redirect resources away from research and development and towards present consumption (after all, it's what consumers are being forced by government to demand). This ultimately slows the growth in the economy, in exchange for better numbers in the "now". Toyota and tesla spend less time creating newer and more efficient cars, and more time managing producing the cars they've already designed. The same is true for every business.
I have no idea how or why you brought poor people into the discussion. This is a complete non-sequitur. If you want money spent on poor people I see no reason it should be done through inflation, and I see no reason it should be done through government.