Ryan Avent Agrees: Demand Inflation Now!

DIN. We should print up lapel buttons.

I suggested this campaign some time ago:

This would:

• Transfer relative purchasing power (hence power) from holders of financial assets to holders of real assets — from Wall Street to Main Street — and from (relatively few) creditors to (many more) debtors.

• Spur both consumption spending and investment spending (on real assets) by individuals and businesses — driving our economy toward its full capacity and employment potential.

• Deflate the country’s massive overhang of under-collateralized business, personal, and government debt. (Debt that is not backed up by sufficient quantities of real assets.)

If managed properly, it could even result in wages rising as fast as prices (or even — pas possible! — faster) without the dangers of the bogeyman “wage-price” spiral (of which there is zero sign at this time).

Read Ryan here:

Business cycles: Demand more inflation | The Economist.

Cross-posted at Asymptosis.