When the economy is down, some economists say it’s time to “reflate” the economy. Tom Brady is not one of them...and not just because he’s not an economist, if you catch our drift.
Reflation is when the government increases the money supply, reduces taxes, or both, in order to stimulate the economy. Along with the Keynesian notion of today, reflation assumes that spending, spending, spending is the answer, and that people will spend more if they have more money. When recessions hit, everyone’s afraid, so they end up saving more than spending, which just makes the recession even worse. Ironic, isn’t it?
Reflation is a broad term, encompassing both actions of the central bank (monetary policy, like raising the money supply) and Congress (setting tax law). It’s called “reflation,” because it’s less about what specifically is happening and more on the effect it will have, i.e. inflation.
When there’s the same amount of value in a system, but more dollars, that decreases the value per dollar. With more dollars and the same amount of stuff, prices increase. Inflation-nation.
Still, reflation isn’t a dirty word (like Deflategate). It implies that the government is trying to recover price levels to the previous long-term trendline, and not far above in the short-term, like with normal inflation. In their eyes, it’s justified...a “catching up” to where we were before more than anything else.
But the real question is: what do Tom Brady’s eyes say?
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Finance: What is Stagflation?0 Views
Finance allah shmoop What is stagflation All right well to
win a single male deer gets really pumped Yeah maybe
that well it's actually a really bad economic situation The
economy is stagnating not growing and maybe it's even shrinking
with unemployment rampant And at the same time prices are
getting higher That is there is in fire ablation Well
fuse those two elements together and you have stagflation Generally
high inflation and stagnant growth live on opposite sides of
the economic playground You usually don't have one without the
other far far away Like if the economy is weak
and demand is light and people are unemployed Well then
why Or even how could prices possibly go up in
an inflationary environment rather than down Yeah doesn't make sense
But this phenomenon does happen So what causes the perfect
storm to create it To create this stagflation Well it
could be one of two things Really There might be
a supply shock Like if oil prices suddenly skyrocket like
they did in the seventies Or there is quote extra
unquote e two largest supply of money Well how does
that happen While the government simply prince too much cash
The central bank expands the money supply and or creates
too much credit low interest rates for borrowing for all
and well now we have inflation even in a stagnant
time Then taxes go up and or interest rates rise
so we have slower growth Punishes it on the other
waves People are starting to buy last They're feeling the
interest rate Incheon was expensive credit cards right They bite
you when you go to the mall and you have
to pay twenty two percent a year So yeah it's
a rare situation but it has happened in the past
So when did this phenomenon most recently occur How vicious
was it Yeah the nineteen seventies they're known as the
era of stagflation The government was manipulating the business world
trying to grow the economy while at the same time
demanding wage khun trolls feeling supply and supporting unions making
america less competitive globally while the rest of the world
was suffering as well as we were under the oil
price shock that the arab opec oil boycott of america
and the rest the world kind of came to bear
it was an ugly time the era of stagflation and 00:02:19.61 --> [endTime] yeah thanks there jimmy
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