News for hackers. Stuff that matters.
Re:Stock buybacks are dangerous for the economy by AnthonyMouse on Tuesday March 17, 2020 @02:45PM (#22608568)
People can still buy stuff, and moreover they need to -- even if you're staying home you still need to eat and pay rent and utilities. But now people are concerned with how long this will last, which makes them want to conserve. Naturally this is deflationary -- people place a higher value on holding currency than buying stuff because they're not sure if they'll need savings soon -- so you need an inflationary force to counteract it. Printing money and giving it to people does exactly that. You put more money in their pockets and they're less reserved about spending it, and then fewer people lose their jobs.

You don't even get the inflation until later, because all it's doing now is counteracting the deflation we would have otherwise. And later the inflation can be addressed by raising interest rates.

There are no comments on this comment yet.