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Economics Stack Exchange works best with JavaScript enabled But mandated prices were so low it forced domestic companies out of business. The best answers are voted up and rise to the top Beyond all questions of theory—his own included—Friedman consistently argued for an approach in which economic policies are judged by their results, not their intentions.Interestingly, Robert F. Kennedy, who would be seen by many as the political antithesis of Friedman, expressed a similar view in a 1962 speech at Japan’s Nihon University, stating that America’s greatest successes come from favoring “experiment over ideology.” True experimentation does not mean recklessly trying any half-baked idea that comes along, but carefully tracking the results of every action undertaken and adjusting accordingly.With our current ability to gather and analyze data to a degree past generations could not have fathomed, these sentiments are more relevant now than ever. Directing the additional revenues toward paying down government debt effectively squeezes the money supply, cooling things down. But what happens if she keeps printing money?

Of course, following this path too far in practice leads into the political minefield of wealth redistribution, where many noble intentions have gone to die.If Friedman was right that inflation is all about the money supply, then the Federal Reserve, America’s central banking system, has the greatest power to prevent it. Our wages are now rising, but our corrupt system also allows companies to unfairly take advantage of us. Twitter. The price has increased, but, the quantity of output stays the same. Former President Hugo Chávez had instituted price controls for food and medicine. Perhaps people would realise that money cannot afford their needs and they would switch to other means of exchange.I don't get demand increase with more money.

Printing more money means we (the “people”) get more money in our pockets. Printing more money, without a corresponding increase in the overall output value of the economy, necessarily decreases the currency’s value, with prices rising in response.If Friedman was right, the U.S. could be tiptoeing on an economic minefield over the next several years.

Given that there will, in fact, be a tomorrow, it is a good time to take a closer look at both the theories and the realities of monetary growth and inflation.As World War II wound down and its massive economic impact became clear, leaders from over 40 countries met in New Hampshire to hammer out a plan to prevent a global financial collapse. When talking about inflation most people think of an increase in the price that they pay for goods and services. The first beneficiaries are those who took out loans and find that higher prices make their debt worthless by comparison until it is virtually wiped out.

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