From what I know, the government can make cash out of thin air, but this causes inflation levels to rise. Or is everything they’re giving out just their surplus?
In: Economics
Very roughly:
More money means higher prices for scarce goods, goods where there isn’t enough for everyone who wants them. They get more money, they raise their bids, and only the highest bidders win.
More money doesn’t change the price of abundant goods, goods where there is more than enough for everyone who wants them. They get more money, so some people who were too broke to subscribe to a streaming service, or to pay for the signature sandwich instead of the dollar menu, now they can; but there’s plenty of sandwiches and no limit to how many subscriptions a streamer can support, so there’s no reason to bid up the price.
Inflation measurements are based on what most consumers buy, and the stuff most consumers buy is abundant.
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