the affordability crisis is downstream of inflation. governments should stop inflating the money supply, but of course they won't ever do this because they would then need to generate revenue another way, which would be to raise taxes. inflation is really just a hidden tax and it's easier for them to "tax" without pissing off citizens.

and so really the solution is to reduce spending. which, to some extent, is so obvious it kind of hurts.

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sdf4j 3 hours ago | parent | next [-]

The consequences of reducing spending are also obvious, I won’t call it a ‘solution’ given how bad they hurts.

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t0mpr1c3 3 hours ago | parent | prev | next [-]

Nobody wants to go back to the gold standard.

Inflation is useful (within limits). So is deficit spending in a growing economy.

> Inflation is really just a hidden tax

No it isn't. The idea that the government should fix the value of money -- and that if it does otherwise it is stealing out of your pockets -- is goldbug crank territory.

If inflation was a tax, then deflation would make people richer. It doesn't. Why? Because in a deflating economy, your creditors can't pay you back.

Deflation is very damaging, and avoiding it is more or less the number one goal of macroeconomic policy.

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missedthecue 2 hours ago | parent | next [-]

Deficit spending is not universally able to create wealth. It can when invested in durable infrastructure at reasonable prices that increases productivity of the economy. But when countries borrow to pay pensions and other transfers, it destroys wealth and makes society poorer.

	▲	t0mpr1c3 2 hours ago \| parent [-]
		I agree that inflation and deficit spending can be bad. But neither is always bad.

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slopinthebag an hour ago | parent | prev [-]

[dead]

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joshuahaglund 2 hours ago | parent | prev | next [-]

What's wrong with taxing the rich to maintain current spending?

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jandrewrogers an hour ago | parent | next [-]

Taxes on the rich are already at European levels in the US. There simply aren’t enough of them to cover current spending.

It is a similar issue with taxing nominal wealth. 2/3 of nominal wealth in the US is completely non-liquid. Taxing the liquid fraction is essentially leveraged as a result, causing a catastrophic collapse in the value of similar investments by ordinary people as a side effect. Impoverishing a large portion of the middle class to own the rich isn’t a recipe for political success.

	▲	superice an hour ago \| parent [-]
		We’ve got to stop pretending loads of wealth is non-liquid and therefore off limits. The rich borrow using it as a collateral, if they can do that for their own purposes, they can do that to pay their fair share of taxes too.

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denkmoon 2 hours ago | parent | prev | next [-]

That the rich don't want to be taxed, obviously. and manage to convince a voting plurality that they shouldn't.

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nradov 2 hours ago | parent | prev | next [-]

That question assumes that the current level of spending is optimal. Regardless of who pays the taxes, are we getting a good value for that spending? Or could it be drastically cut?

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missedthecue 2 hours ago | parent | prev | next [-]

Laffer Curve. Depends on the country but France for example already takes 44% of their GDP as tax, runs heavy deficits, and attempts to make up the difference by increasing taxes on the wealthy causes them to leave.

At some point they'll need to do austerity.

	▲	underlipton 2 hours ago \| parent [-]
		It's well-established that Americans are much earlier on the curve than wealthy people would like to believe. Mamdani Doctrine: ignore the part of your brain screaming rich people double consciousness and just do what's right for and fair for most people. At this point in history, that's taxing wealthy people - including paid-off-6k-sq-ft-house-with-2-people-in-it pensioners and $200k-a-year-living-paycheck-to-paycheck-in-a-coastal-metro yuppies. Yes, there'll have to be some tough decisions; austerity, indeed.

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IG_Semmelweiss 2 hours ago | parent | prev [-]

Confiscating the wealth of all U.S. billionaires (~$8 trillion) would fund federal operations for roughly 9 months...1-time only.

After that, the money is gone.

The underlying problem of high, persistent government spending remains. This isn’t primarily a “tax the rich” problem.

	▲	johnnyanmac 24 minutes ago \| parent \| next [-]
		The goal of taxing the rich isn't to save the enormous defecit. It's to make sure they can't buy elections and undermine democracy. It also does help to reign in some spending. Because a lot of spending is indirectly performed through subsidies. Oftentimes in the modern day for the rich who can already afford such initiatives.
	▲	underbluewaters an hour ago \| parent \| prev [-]
		Even if this were true, such a tax program would limit the outsized corrupting influence of this class. That's arguably an even greater benefit than just helping with the deficit.

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manlymuppet 3 hours ago | parent | prev | next [-]

Well, a little bit of inflation is actually good for the economy long term, and we have to balance that with the opportunity of cost of not spending.

Yes, the amount of government spending currently is likely too much, but by not spending the opportunity cost is sometimes greater. As the article contends, the solution to the affordability problem is to raise wages. If you can use the levers of government to induce growth that naturally raises wages, more deficit spending might be worth it.

	▲	slopinthebag an hour ago \| parent [-]
		[dead]

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1270018080 3 hours ago | parent | prev [-]

This is the most impactful economic discovery of the century. You can raise taxes as much as you want if you add a layer of seperation to it and print currency.