A response to Michael Roberts blog “Deficits, debt and deflation after the pandemic”
Whewg! I hope ole Robbie has it wrong about inflation. I am on a fixed income and that will be very bad news for such as I.
However, I don’t expect that to happen, not soon anyway. I do not think the economy will open up much. The business people will keep trying to force society open, the pandemic will keep forcing it shut again.
I am old enough to remember the “stagflation” of the 1970s. I knew then that the problem was that the limits of productivity on a finite earth had been reached. I didn’t understand the effect of technological advance in reducing profits but that was a big part of it too.
The solutions for the oligarchy after 1980 has been to beat down the incomes of the subordinate classes. Most of the increased GDP since then has been in “fictitious capital”. That is about to come to an end, pandemic or no pandemic.
Government is about to have no choice in managing the crisis but to start issuing sovereign money again. I keep asserting that the main problem in the economy is private banks and debt and debt money. That was the point of my response to Robert’s previous article in this series. Url for it is here;
To conclude, I recall that the thing which really drove inflation in the 1970s was this mentality of “get it today, it’ll be more expensive tomorrow. And we got lotsa money anyway.”
The mood of the 2020s is much different. If prices of things go up, people will just stop buying. People are holding onto their money; if they have any.