eli5: if we hypothetically got every American to burn a $20 bill, could we slow down inflation?
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Yes.
There is a pervasive misconception that inflation is simply a result of the amount of money that exist, and this is false.
If inflation was just because of the amount of money that exist (money printed) then we would have seen massive inflation since 2008. In reality, from 2008 to 2018, money in circulation increased by 84.8% while inflation was a total of 19.4%. This disproves the majority of other comments in this thread.
So what causes inflation? Money that is actually being spent. This is because prices only go up when two people want to buy something and they can’t both have it (Demand is greater than supply). Money not being spent is the same thing as a person who doesn’t want to buy something.
I forget the exact statistic, but a large number of Americans live paycheck to paycheck. These are people who are actually going to spend their money and buy stuff. If every single one of them were to burn $20, this would remove some* of the money that actually causes inflation.
I can’t say how much of an impact this would have on inflation, but it would be way more notable than what others are saying.
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