[noahtallen]

Currently set to resume in June or July, I believe.

But I find this line of thinking dubious. It costs more than $1700/month for 10 years just to pay for med school? ($160k total cost at 5% interest — and both of those values are at the low end.) That’s an incredibly stupid situation for our economy to be in. That is a massive barrier to entry for a some very important careers.

And on top of that, we’re saying that these massive payments are crucial to getting inflation in check?

Maybe you’re right that this “helps” superficially reduce inflation. But the root problem is much deeper, which is that our economic system cannot handle people making a decent money.

The root cause is likely a lot closer to big companies jacking prices of basic goods and services, blaming inflation, and making record profits in the meantime.

[jjeaff]

Our economy can handle a lot more people making more money. It just can't handle it suddenly. Especially during and right after a global economic shutdown.

Companies are still catching up with supply. Lots of chemicals and other base materials are still in short supply. A lot of this stems from China still having shutdowns and taking a long time to recover.

Companies also don't want to spend tons of money expanding production when they don't believe the increased demand will continue forever and especially while interest rates are increasing. After supplies catch up, and student loans resume, they likely expect demand to return to pre-pandemic levels.

[trashtester]

> It just can't handle it suddenly.

I think there are factors there that is going to cause permanent reductions of production capacity in many economies, though:

1) Demography: Boomers have started retiring in large numbers, and a lot more retire in the next 5-10 years. There are not enough young people to fill all of the openings they leave behind. Also, work participation rate among young people is falling for various reasons. Unlike their parents, the boomers have a lot of saved up wealth and less of the frugality of those who remembered the 30s, meaning many will continue to have high levels of consumption into their retirement.

2) Reversion of globalism: Covid made many realize that global supply chains are fragile during emergencies, and many countries are re-shoring essential and strategic production, such as medical supplies, chips/electronics and agricultural products. The cost of this improved resilience is lower efficiency.

3) Increased world tension: With the invasion of Ukraine and the possibility of war between the US and China over Taiwan, world spending on armaments is going up, taking production capacity away from consumer goods. The same tension is already causing reduced trade.

4) Populism/socialism/environmentalism: There appears to be a surge in populist, socialist radical environmentalist sentiments in many places, with demands to "tax the rich" and other actions that will make investments less attractive.

In sum, I think these factors will have noticable effects on the supply side in many years to come, causing inflation and/or interest rates to stay elevated for 10 years or more.

Unless there is a sudden surge in automation, of course.

[trashtester]

> But the root problem is much deeper, which is that our economic system cannot handle people making a decent money.

The value of money is defined by what you can buy for it. If there isn't enough stuff to buy, either prices go up or there will be shortages of those products. If I have to chose between paying 20% more for the bread or to find the shelves empty half the time, I prefer to pay 20% more.

In "other economic systems", meaning socialism, empty shelves are pretty common.