More to the point, the whole point of borrowing to invest, is that if done successfully, your business grows in a sustainable manner, and you can continue to pay that person money for the business you have built.
This is how business loans are supposed to work. You start with nothing, you get a pile of money, you build something that will earn that money back, and hopefully have built a stable company in the mean time that will continue generating wealth even after the terms of the loan come due.
This shouldn't seem foreign on a startup and entrepreneurship site.
>Would it send inflation skyrocketing the way that the stimulus sent inflation skyrocketing? :P
From what I've read, inflation isn't a problem in the current economic climate because even with the increased money supply, no one is actually spending any money (or more accurately, most consumers don't have the money to spend) so there is no reason for prices rise since demand is low.
I have no idea how Cuban's idea would affect inflation.
Of course this is HN, so for all the knowledgeable people out there, please correct me if I'm wrong.
Inflation control is (like most economic problems) a balancing act. In my opinion way too much attention was paid to potential inflation problems in 2009/2010 instead of the real problem: unemployment.
There is actually rampant inflation. Global prices for food, energy, gold, and many other commodities are at or near all time highs. The reason this might not show up in some metrics is because we are also experiencing deflationary collapse in previously inflated sectors like housing.
Nope. Gold prices are going up because people believe gold prices will keep going up, and keep speculating as such. It has no bearing or relationship to inflation, since most of what we buy is not made of gold.
Energy prices are 50% off their all time highs. When they were high, it was a demand story, not an inflation story. Likewise, with food.
In any event, even if all of those statements were true, that's not what inflation means. Inflation is not "things get more expensive", it's "money gets cheaper". There's a big difference.
Inflation is low. Very low. Too low, in fact. If inflation were a couple percent higher, and nominal GDP were also a couple percent higher, the economy would look a lot better than it does right now.
Because if you look at the data, current inflation doesn't seem to be out of line with inflation prior to the 2009 economic collapse:
http://www.fintrend.com/inflation/inflation_rate/CurrentInfl...
More to the point, the whole point of borrowing to invest, is that if done successfully, your business grows in a sustainable manner, and you can continue to pay that person money for the business you have built.
This is how business loans are supposed to work. You start with nothing, you get a pile of money, you build something that will earn that money back, and hopefully have built a stable company in the mean time that will continue generating wealth even after the terms of the loan come due.
This shouldn't seem foreign on a startup and entrepreneurship site.