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[quote=Anonymous]Let's have a thoughtful conversation about inflation and fiat money

The Federal Reserve is tasked to balance inflation and unemployment, trying to keep unemployment and inflation both low, and not zero.

[b]Why is inflation good? [/b]Inflation is effectively attacks on the real value of savings. Thus, inflation encourages people to put their money to use as consumption or investment. This is good because it motivates  people to use money to convert idle time and resources idle people to do work to create real value. Money is only a tool of social coordination. It is not valuable in isolation.

[b]Why is inflation bad?[/b] Inflation is celebrated by economists as a tool to drive down real wages, giving automatic default power to management, lowering workers wages while everyone is sleeping. In theory, labor could negotiate automatic cost of living / inflation adjustments, but this is difficult, especially in high unemployment environments.

[b]Why is inflation sometimes unavoidable?[/b] Money isn't value. Money is a catalyst for value creation and exchange. If money increases or value decreases, inflation is a natural result, unless money is destroyed (such as through taxation and fiat destruction of the collected  funds).

[b]How is inflation abused?[/b] when fiat "money printers" distribute new money, the recipients of that money get more money than inflation devalues that money, unless they are doing work to earn that money. But often they wre overpaid. Everyone else pays the "tax" on real value that money represents, even if they don't get the theoretical intended benefit of opportunities to earn more for their labor via the catalytic effect of money on production and trade .

[b]Why is unemployment bad?[/b]
Idle labor is dead weight loss. You can't save your idle hours for future work. It has to be used or destroyed at a constant rate of 24hours / day.

[b]Why is unemployment good? [/b](Why is full employment bad?)

At full employment, someone wants work done that no one can do. That is a dead weight loss. We want need to increase labor supply or productivity to create everything we want to consume.

[b]What is a way to balance these positive and negative effects? 
[/b]
Strong democratic leadership that constantly monitors for out or control effects. Taxes on extreme wealthy aggregation, and redistribution of money or things of concrete value to people losing out in maelstrom of money circulating the economy -- earned income tax credits, jobs guarantees for unemployed, and basic human welfare (food, shelter, "reasonable" healthcare) for the unemployable. [/quote]

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