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Comment by cool_dude85 | Hacker News Reader

What does debt to gdp have to do with the labor share of income?

It doesn't directly. Financial repression does though, its a "solution" to high federal debt and leaves the average person having to eat the cost.

Its a bit like austerity, but instead of taking a share of everyone's wealth they just make all of our stored wealth worse less. They do that by inflating asset prices much faster than wages can keep up, meaning those large corporations at the top get rich while the average person falls further and further behind.

It seems like the economy is kind of doing this on its own? The Fed has been keeping rates higher, despite political pressure, without yet having achieved the inflation target.

The economy is a measure of past financial behavior. I'm not sure how the economy could do this on its own, we're doing this to ourselves. I say "we" collectively there, these are all results of human choices not an amorphous concept of an economy.

> I'm not sure how the economy could do this on its own, we're doing this to ourselves.

i dont understand. the economy is the royal we doing things. the economy doesnt experience time if we arent doing thongs to ourselves. this isnt a distinction with a difference

> It seems like the economy is kind of doing this on its own?

This is what I was replying to. At least to me, saying the economy did something on its own takes the agency and responsibility off of us. My point was that the economy is just backward looking analysis of how money changes hands, it does nothing by itself and when things change its the result of us making decisions.

I suppose I read “repression” as something that is induced by policymakers rather than chosen by the masses / “the invisible hand,” so I framed my response in those terms. I think we agree though, the wording is just different.

Don't quote me on that, but people are saying that despite American companies are getting more money, people are getting even less. Or that's my understanding. Happy to be corrected though

Well, because one of the strategies of earning more money is paying workers lesser.

That's one of them. Also not paying back in taxes is a way where you contribute less to the system that generates you more.

This hits people much more than only getting less money.

Public debt burden increases interest rates. This benefits holders of government bonds, who are disproportionately wealthy households and financial institutions. It crowds out private investment and inhibits economic growth, which weakens workers' bargaining power. Deficit spending also causes inflation, which disproportionately hurts people on the lower end of the income scale.

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