A thought experiment that made a lot of macroecon clear to me:

if SpaceX started paying for stuff in “future plots on mars”, prices would increase.

But this would not have a long-run effect on inflation, because GDP would eventually rise by the production of “plots on mars”

More normally, SpaceX could sell stock (which includes “plots on mars” and other future assets) to raise money to buy stuff for its rockets.

i.e. investment is “the future buying stuff from the present”, and so causes short-run inflation, until the future actually comes

what makes govt spending special/govt money different from stocks, is that govt doesn’t need to convince investors that it can create future value like SpaceX does.

tl;dr Elon is right – perpetually loss-making investments cause inflation, regardless of exactly how they’re financed.

but how does the govt actually finance its investments?

so much like a company selling stock, the govt sells its bonds — promises to return some amount of currency. maybe it will pay it back from return on investment (unlikely), maybe by taxes, maybe by money printing, maybe by more borrowing

first of all what’s the difference between “money printing” and “borrowing”? What exactly counts as money — are govt bonds money? Are stocks money?

Is it just about how liquid they are? So if people bought stuff with stocks, because they were totally confident of its value, that would have the same inflationary effect? If I buy $100 in SpaceX stock, then I can use the SpaceX stock to buy stuff, and SpaceX can use my $100 to buy stuff right?

So where does liquidity come in? When talking about what time-frame the inflation comes in? I guess so — creating highly liquid money leads to immediate inflation, while less less liquid assets will create it in the long run?

But nonetheless