eli5: if we hypothetically got every American to burn a $20 bill, could we slow down inflation?

Question

eli5: if we hypothetically got every American to burn a $20 bill, could we slow down inflation?

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Answer 1

I don’t think $20 would do it. That’s only $7B dollars. Maybe $2000 would help?

You don’t have to burn it. You could simply not spend it. Your savings account could probably work, but safely stashing it somewhere off the grid (a safe, it under your mattress) would probably work well enough. Burning money is not necessary.

You’d never get everyone to agree to it, though. People need things. The amount of people living paycheck-to-paycheck in the US is a large number.

And lastly, and most importantly, it would slow the economy down and people would lose their jobs. That’s the trade off. Central banks fight inflation, but once inflation gets below a certain number, they start worrying about unemployment as well.