It'd be interesting to have an accounting of what end-of-the-day benefits people got for giving up their mustard.
You're correct that the new equilibrium would be below 100.
The market will find an equilibrium, but it will involve people giving up mustard because the cost is too high. They have to - there is less mustard. Someone will have to give up consuming mustard and in the medium term it is going to be prices that are the mechanism. That is what prices going up generally mean - the market is shaking some people out so they stop using a product. In the short term I see they have a sign saying "only 1 mustard" or something like that.
But has it been studied that this is actually how this plays out with a low-level consumer good like mustard?
It would be a pretty big difference to me.
Lending money today instead of giving money lets leaders and voters today to punt sacrifices to tomorrow’s taxpayers, and of course inflates college tuition prices so the borrowers have reduced purchasing power, as well as future users of the currency.
That is the whole reason lending for college tuition became a thing. Some genius figured out how to cut taxes today while still being able to say they are helping expand access to higher education to poor people and college students.
Across all goods/services, that means richer people would be able to consume less, and poorer people would be able to consume more. Whether or not people sacrifice eating Dijon mustard is up to them.
The goal is not to guarantee Dijon mustard for everyone, the goal is to mitigate how poor poorer people are.
The other way to bring down Dijon mustard prices is for the government to increase supply of Dijon mustard, or remove whatever is restricting supply of Dijon mustard.
I think we’ll have a lot more of these sacrifices coming up in the next thirty years that will hurt a lot more. Coffee is the one that I’m most worried about.