Another point, could be seen as generalisation of your first point: more money supply than optimal for the economy just makes the entire economy less efficient. It’s entirely analogous to how an organism gets excessive fat and becomes inefficient (and incurs health risks) when over-fed (and I strongly suspect that this is deeper than just a superficial analogy, that there is a general system development law behind this).
More concretely:
Excessive bureaucratisation and creation of ‘bullshit jobs’, i.e., unproductive jobs whose main functions are in organisational politics and labor union relationships. BTW, these bullshit jobs will also mask deeper issues with employment: for example, participation rate (which is different from ’100% - unemployment’ though) is an important economic metric, but it seems to be misled (Goodhearted if you wish): what we are really interested in is productive participation rate.
Low productive participation rate is not only due to bullshit jobs, but also due to excessively many rentiers or early retirees created by too high money supply. Paradoxically, this leads to a decrease in the quality of life: many people have enough money to retire from productive jobs ⇒ shortage in real sector labour: doctors, public transport workers, street cleaners, canalisation maintenance workers, electricians, etc. ⇒ public services start to crumble, and wait times for non-public services (e.g., private doctors) increase, and the prices for both rise ⇒ lower quality of life even for those rentiers and retirees!
Creation of totally inefficient startups that burn money, don’t have a path towards profitability, but still raise a lot of funds. It is possible to overshoot here in another direction, too, but the current situation when there are so many deeply unprofitable unicorns in late venture investment rounds and even long IPO-ed is unique.
Downstream effect of this unhealthy startup environment is https://en.wikipedia.org/wiki/Enshittification, which is at least partially caused or exacerbated by the monetary overhang. Too many startups are funded and are confident that they can raise money for a very long time ⇒ Price war and winner-take-all mentality ⇒ Quasi-monopolies and enshittification. We have seen this with Uber, and we are likely see it on a massive scale with AI startups, which are currently free or massively subsided, but later will come to eat our arm and leg. But note that I don’t say that the over-supply of money is the only cause of this dynamic.
Another point, could be seen as generalisation of your first point: more money supply than optimal for the economy just makes the entire economy less efficient. It’s entirely analogous to how an organism gets excessive fat and becomes inefficient (and incurs health risks) when over-fed (and I strongly suspect that this is deeper than just a superficial analogy, that there is a general system development law behind this).
More concretely:
Excessive bureaucratisation and creation of ‘bullshit jobs’, i.e., unproductive jobs whose main functions are in organisational politics and labor union relationships. BTW, these bullshit jobs will also mask deeper issues with employment: for example, participation rate (which is different from ’100% - unemployment’ though) is an important economic metric, but it seems to be misled (Goodhearted if you wish): what we are really interested in is productive participation rate.
Low productive participation rate is not only due to bullshit jobs, but also due to excessively many rentiers or early retirees created by too high money supply. Paradoxically, this leads to a decrease in the quality of life: many people have enough money to retire from productive jobs ⇒ shortage in real sector labour: doctors, public transport workers, street cleaners, canalisation maintenance workers, electricians, etc. ⇒ public services start to crumble, and wait times for non-public services (e.g., private doctors) increase, and the prices for both rise ⇒ lower quality of life even for those rentiers and retirees!
Creation of totally inefficient startups that burn money, don’t have a path towards profitability, but still raise a lot of funds. It is possible to overshoot here in another direction, too, but the current situation when there are so many deeply unprofitable unicorns in late venture investment rounds and even long IPO-ed is unique.
Downstream effect of this unhealthy startup environment is https://en.wikipedia.org/wiki/Enshittification, which is at least partially caused or exacerbated by the monetary overhang. Too many startups are funded and are confident that they can raise money for a very long time ⇒ Price war and winner-take-all mentality ⇒ Quasi-monopolies and enshittification. We have seen this with Uber, and we are likely see it on a massive scale with AI startups, which are currently free or massively subsided, but later will come to eat our arm and leg. But note that I don’t say that the over-supply of money is the only cause of this dynamic.