If I run a bakery and you run, say, the Mint...

Ten years ago, I bake a loaf of bread, and sell it for a dollar. Then I invent an amazing machine that can produce the same bread more cheaply. I'm about to drop my bread prices, but you mint some new coins and add them into circulation. So I keep the price at a dollar per loaf.

I scrutinize my bread supply chain to the last detail. I optimize the flour, I optimize the temperature. I fire all the workers and replace them with machines. I'm saving every penny I can. Loaves get made faster! Loaves get made cheaper! Bread is flying off the conveyor belt!

You pull a lever and crank up the printing press. Dollars are being added in the millions, in the billions!

The price of bread stays at a dollar; has the currency been debased? I honestly don't know.

(Addendum: If your salary was a dollar ten years ago, and a dollar today, you can afford just as much bread as you used to, but your chance of buying a majority share in my bakery, or outbidding me on a house in a good school district, has gone way down.)

> The price of bread stays at a dollar; has the currency been debased? I honestly don't know.

i say no it hasn't. Imagine a third person, who mows lawn for $1 an hour. He has not improved his lawn mowing during this time period which the baker has made improvements to bread making. So the work of mowing the lawn for $1 should stay the same regardless of what the bakers did - and therefore, the lawn mower being able to buy bread for $1 is not unreasonable.

You are building pressure into the system. It's like letting a dam fill up. That water is not circulating (please bear with tiny mistakes in my analogies). It's staying somewhere and it is ready to be deployed at any given time. If there is a natural disaster or any other kind of pressure to empty the dam then there is a very real risk of a flood.

The currency has not been debased. However, the potential for it to debase in the future has grown massively.

One day politicians are going to discover sensible policy (maybe Biden will do it, I don't know) and somehow magically increase inflation. That same day will open all floodgates on all dams.

The correct strategy would be to increase taxes and interest rates and cut stimulus spending once that has happened and we'll be fine. Crying hyperinflation is not the right strategy.

Have you had to pay for medical care, child care, housing, care for elderly or disabled loved ones and/or education?? How on earth can you say that inflation has remained low??? All of those have become insanely expensive and people die all the time because they can't afford them!

Just because cheap, crappy electronics and egg McMuffins don't appreciate in cost and stay crappy and cheap does NOT mean inflation is low. Anyone can play stupid games where you say inflation is low if you only pick certain goods made by robots or poor people overseas.

But none of those things have risen at the same rate, or even comparable rates. The increase in childcare has kept up with the average wage increase, but education is hundreds of times more! I don't even know how you'd price medical care, as everyone is effectively charged differently, even for the same service. Housing doesn't track either of those -- purchasing follows literally nothing, renting follows local wage. So what's going on here?

(As a note, local wages have risen less than the government's calculation of inflation, which is primarily food and secondarily consumer goods)

> […] but education is hundreds of times more!

You're not wrong, but I ran into an interesting observation: yes the prices for many high-end institutions have gone up, but those are 'list' prices.

How many people pay list? How many people get bursaries and offsets from endowments?

I'd be interested in seeing those stats.

From what I can tell MMT is about carefully choosing the right place and strategy to print money.

By recognizing what the real limits to borrowing are you also gain an understanding of what to spend the borrowed money on.