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28 sats \ 8 replies \ @Msd0457890 19 Nov \ on: The Inflationists’ Narrative Is Crumbling econ
I think that this new presidential term of Trump is going to be a complete challenge, a debt that exceeds 36 billion dollars, a growing inflation and they want to cure it by reducing public spending, which does not seem very clear. What measures could help Trump get out of this chaos that inflation is going to cause him? and the bad policies of the previous administration?
Reducing government spending would help, but you're right that the plans for that are not clear yet.
Radical deregulation would also help. There are a bunch of compliance costs pushing prices up.
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When you talk about de-rugulation, what would you apply it to in the economy itself?
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I'd apply it to everything, but that's probably not what you really want to know.
What I'm more familiar with are labor regulations. There are a ton of rules about working conditions, benefits, who can be hired, who can be fired and all of those things cause companies to spend money making sure they're compliant with the rules.
They also don't hire everyone they would otherwise want to and they don't fire everyone they otherwise would. Both of those reduce productivity. That's also inflationary (in the price sense).
On the production side, there are innumerable environmental and safety regulations that make everything more expensive. That should all be replaced by manufacturer liability.
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So that means that industry is part of the inflation problem, does that mean that it plays an important role in the inflation that the United States currently has?
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Everything in the economy goes into price formation. More requirements on producers makes prices higher. More spending from consumers also drives prices up.
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So what would stabilize both the market and inflation? Measures that the government should take, but we know that the bureaucracy would not allow it? Or could it?
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The best thing for the government to do is go away. Markets sort themselves out.
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That would be great, but I think it is a great utopia to believe that the government or state will disappear. Human beings by nature need someone to blame for everything (inflation, poverty, crime, etc.), which reminds us that the system and its money are a fallacy.