lee wrote on Aug 2
nd, 2026 at 4:48pm:
thegreatdivide wrote on Aug 2
nd, 2026 at 4:45pm:
It can be ignored if it doesn't happen immediately, eg if government spending its own money increases productive output; or eg the c-i-government can reduce inflation by subcontracting the building industry (as required) to rebuild the nation's public-housing stock at no cost to taxpayers, thereby stabilizing/reducing house prices and lowering rents.
Nope. All; it does is kick the can down the road.
How does eliminating a major component of inflation (namely, high mortgages and high rents) plus all the social costs associated with homelessness, "kick the can down the road"?
Quote:How is Albo's reducing house prices going? People not in the market because of genuine fears that a fall in the market will lead to mortgages exceeding values. It has also not lowered rents.
Correct: when it comes to economics, Albo is Neoclassical dumb**se like you, though - unlike you - he does support social housing - hence the dumbarse Neoclassical solution: borrow money
'off-budget' to take a bet on the stock market to fund the buildout, aka the HAFF. Totally inadequate, and depends on the stock market rising.
(google)
The federal Labor government's Housing Australia Future Fund (HAFF) is a $10 billion investment program designed to build tens of thousands of social and affordable rental homes across Australia Quote:How is eliminating a major component of inflation in the CPI "stupid"?
Quote:From duck.ai "es—all else equal, increasing the money supply tends to devalue a currency because it raises the amount of money relative to goods and services.
"Tends to"....or does? Obviously the duck knows tendencies aren't outcomes.
Quote:Key intuition:
More money chasing the same goods → prices tend to rise (inflation), so each unit of the currency buys less.
Ignores the supply side, eg more money spent on robots increases output.
Quote:If that inflation is higher than other countries, your currency often loses value in exchange rates (depreciation) because investors expect a weaker purchasing power going forward.
The Oz treasury can fund a million public housing units (without 'taxpayer money' and without causing inflation) because Oz can supply the labour and materials from domestic sources, indeed the public housing buildout would DECREASE inflation as already explained (by subcontracting the building industry for the required time, thus avoiding competition with the private sector).
Quote:A useful way to phrase the relationship is:
Money supply ↑ ⇒ expected inflation ↑ ⇒ purchasing power ↓ (and often exchange rate value ↓).
"Expected inflation"....another mainstream piece of nonsense refuted in the linked Michael Roberts' article examing inflation.
https://www.ozpolitic.com/forum/YaBB.pl?num=1645944963/1485#1497#1497
Quote:Caveat (still consistent with the statement): the effect depends on why money supply increases and whether the economy can expand output. If more money corresponds to more real production, inflation/devaluation may be smaller.
Exactly....indeed, not only smaller, but non-existent, when the economy expands output sufficiently to absorb the extra-money supply.
As Micheal Roberts explains: Friedman's formulation MV= PY is an identity, not causation. M= money supply: V is velocity of money: P is the price level, and Y is the economy's output. )
So (in the macro-economy), M can increase without causing inflation if Y increases while price per unit remains constant (or decreases) eg by automating production.
Quote:That of course does not line up with Australa's decreasing productivity.
Productive capacity and
productivity are different, according to types of goods and services being considered: automating BHP's trains in the Pilbera increases productivity, but increasing productive output in the services sector requires a different metric (nurses can't treat twice the number of patients).
(google)
output (capacity) is the total amount produced, while productivity is a ratio measuring how efficiently resources (like time or labor) are used to create that output.