[nahiluhmot]

In addition to slowing the production of money, the URV program essentially tied wages to the inflation rate. To me, that seems like a fundamentally important step in both restoring the people's faith in the currency and maintaining the standard of living for them. By only printing less money, they could easily fall into a period of widespread poverty while inflation rates continued to rise -- albeit at a slower rate.

Of course, I'm just an armchair economist, so perhaps there's part of the picture that I'm not seeing.

[rtpg]

Mandating that salaries are tied to inflation is an interesting concept indeed.

I'm still majorly confused as to why not all legislation uses "inflated dollars" or some metric that keeps things in line with inflation. Well not confused, per say, more like disappointed.

[motoboi]

IMHO, tying prices and wages to inflation is exactly what you should avoid as this will fuel inflation even more.

[jjaredsimpson]

Then instead of arguing about increases in spending you are just arguing about metrics of inflation. I'd rather legislators argue about the former.

[alasarmas]

I think legislators are already arguing about both increases of spending and metrics of inflation. Remember the whole "chained CPI" debate about the metric to use to calculate cost-of-living increases for Social Security benefits?

[rtpg]

sure, but in the case of minimum wage, for example, it would still be rising by some (certainly imperfect) metric. Legislative deadlock would not stop these things from rising at least a little.

[marcosdumay]

Brazil had wages tied to inflation for a long time before the URV.

[nandemo]

Sorry, but that's exactly wrong. There was widespread indexation before the URV or, more precisely, before the Real Plan. Salaries, pensions, interest rates, fees, etc, everything was tied to an inflation rate or another. The Real Plan did away with the indexation.

See motoboi's comment for more details.

https://news.ycombinator.com/user?id=motoboi