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83% of Americans Are Belt Tightening Due to Inflation Pressures

forbes.com

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Re: 83% of Americans Are Belt Tightening Due to Inflation Pressures

#81

Post by AnimalMuppet »

thrwawy12345 wrote: post #36
ping_pong wrote: post #12

Economists like Bernanke have talked about dropping money from helicopters in the sky, in order to prevent deflation. What the government has done in the last year with its $10+ trillion in stimulus, is the exact definition of dropping money from helicopters and yet no one is pointing this out. Which means we must have narrowly averted a truly horrific situation as a country. The fact that everyone keeps talking abou…

> Which means we must have narrowly averted a truly horrific situation as a country. Citation needed. I don't understand the logic here.

Adding $10 Trillion should have created a great deal of inflation - much more than we see. Therefore, if it were not added, we probably would see much worse than no inflation - we would see significant deflation. That's far more ruinous than mild inflation is.

Re: 83% of Americans Are Belt Tightening Due to Inflation Pressures

#82

Post by otnihoithiu »

purple_ferret wrote: post #24
trey-jones wrote: post #2

Wow. Who could have foreseen this? I suppose that's different from "Who could have stopped this?" Our economic problems are not easy ones to solve, but when trillions of dollars of are created out of thin air and distributed to the populace, you had to know this was coming.

The idea that more cash has driven up the price of basic goods this quickly is almost certainly frivolous. The pressure simply isn't there, especially with wages still so low. That's not to say prices haven't been suppressed over the years in various ways that combat normal inflation (6oz denim Jeans that are now 10% Spandex I'm looking at you) and there's a ton of money in the system that have mostly went into asset…

Prices aren't up because people are bidding more for finished goods. Prices are up because commodity costs are up, so the inputs to production cost more. Those costs are passed onto end consumers, to the extent they can afford them, or they are passed on in the reduction in the availability of goods.

Re: 83% of Americans Are Belt Tightening Due to Inflation Pressures

#83

Post by lotsofpulp »

dragonwriter wrote: post #78
lotsofpulp wrote: post #70

Earlier quoted context omitted.

Giving everyone $30k would. Just the extra $300 per week that people were getting is causing them to be dissuaded from subjecting themselves to the bottom tier of jobs. I’ve spoken to a lot of hotel owners and restaurateurs lamenting their inability to hire people for low wages part time work. And there are fast food restaurants around me that are closed at many times because they have no workers, especially for late…

> Just the extra $300 per week that people were getting is causing them to be dissuaded from subjecting themselves to the bottom tier of jobs Giving people money that you take away if they work dissuades them from taking jobs, especially jobs that net them the same or less than they get without working. That doesn’t really prove anything about how giving people money that you don’t take away if they work effects thei…

It does for the low paying jobs that rely on people not having a choice.

They already live on the bare minimum, but they have to clean toilets to get it. Now the government says you can live on the bare minimum, but you do not have to clean toilets.

So now you have to raise wages to entice people to clean toilets.

You are correct that it is not the exact same situation, but I think there would be even more disruption of the same kind the more you increase the government assistance.

Re: 83% of Americans Are Belt Tightening Due to Inflation Pressures

#84

Post by lainga »

toomuchtodo wrote: post #75
lainga wrote: post #58

Earlier quoted context omitted.

Well printing it and putting it into circulation causes inflation. If you give Bill Gates $1Tn and he hides it under his mattress, that does not cause inflation.

If Bill takes it and buys more farmland, that does cause trickle down inflation (depending on lease rates charges for farming).

yes, but that's putting it into circulation, isn't it?

Re: 83% of Americans Are Belt Tightening Due to Inflation Pressures

#85

Post by sjg007 »

mywittyname wrote: post #55
anotherman554 wrote: post #30

"6% indicated they experience price increases on everyday goods and services. Notably, they pointed to on groceries (96%), gas (93%), dining out (57%), and clothing (42%)" This is a poorly conducted survey if it's trying to show inflation is a problem. This response would be accurate even if inflation was just 2%. The concern isn't inflation but the amount of inflation.

Nominal inflation is fairly well hidden from people. The prices of most goods remain relatively static, or at least stay within a narrow band over an annual cycle. Producers have contracts for fixed prices on inputs and often outputs, so their prices are often fixed for a term. Frosted Flakes may remain $3.99 a box for five years, while a price increase to $4.49 is introduced gradually through sales and promotions. S…

67% of field corn is used for ethanol or animal feed. But regardless, only 10% of the price change in wholesale corn is passed on to consumers:

https://www.ers.usda.gov/amber-waves/2008/february/corn-pric...

And the government heavily subsidizes crops.

Re: 83% of Americans Are Belt Tightening Due to Inflation Pressures

#86

Post by lainga »

halsom wrote: post #80
lainga wrote: post #25

Earlier quoted context omitted.

How does buying up assets lead to price increases in "groceries (96%), gas (93%), dining out (57%), and clothing (42%)"? Are the Koch Brothers hitting up Costco every day?

Gas is up because of the recent pipeline shutdown. Grocery prices have been rising since the start of the pandemic. Far more people are now accustomed to cooking at home. Anecdotally, I am one of them. I buy at least twice as many groceries as I did pre-pandemic and that is not going to change. Also the pandemic is still in full force internationally, especially in places where the US sources major food imports. Clot…

So the trillions being delivered to the rich is the source of inflation (per your comment above) because of... other nefarious things the rich people did, and also other events that they didn't do? Did they need those trillions to be incompetent, maybe? Or to reduce support for redistribution (per your comment pre-edit)?

Re: 83% of Americans Are Belt Tightening Due to Inflation Pressures

#87

Post by wolverine876 »

dragonwriter wrote: post #69
wolverine876 wrote: post #60

The headline confuses me: If that large proportion were 'tightening their belts', economic activity would decline and there would be no inflation. An inflation headline would be, '83% of Americans are buying new cars/computers/homes/washer-dryers' or '83% of Americans have borrowed more than last year'. Inflation is an excess of economic activity - too much money for the available truly valuable investments. It's peo…

> The headline confuses me: If that large proportion were 'tightening their belts', economic activity would decline and there would be no inflation. 83% at the bottom could tighten their belts, and the 17% at the top who control far more wealth could loosen theirs and economic activitt would increase. > and there would be no inflation. Even if we assume the first incorrect statement were true, this would still be wro…

You talk about ways that the headline could be reconciled with inflation, but even if true, the headline certainly doesn't describe an inflationary situation.

> inflation is an increase in consumer price levels

That's a common and well-known symptom (because everyone can see it), but that doesn't define inflation. From Britannica:

Inflation, in economics, collective increases in the supply of money, in money incomes, or in prices.

I used the term 'investments' loosely, rather than spelling out all the possible things on which we can spend money. But actual investments, by the narrow definition, count: asset bubbles, or example, are a form of and sign of inflation (in that one market). Again, inflation is an excess of economic activity for the economic realities of the situation.

> there wouldn’t be demand-pull inflation, but there still could be supply-push inflation

If you mean 'cost-push' inflation, that is caused by increased production costs, which lower production and thus reduce supply and thus, unless demand also decreases, prices increase. If demand also decreases sufficiently, as the headline might suggest, then there's no inflation. Increased production costs aren't the concern behind the inflationary effects of various stimulus measures, which should reduce costs of production (including via cheap debt).

Re: 83% of Americans Are Belt Tightening Due to Inflation Pressures

#88

Post by sjg007 »

jdhn wrote: post #14
ping_pong wrote: post #12

Economists like Bernanke have talked about dropping money from helicopters in the sky, in order to prevent deflation. What the government has done in the last year with its $10+ trillion in stimulus, is the exact definition of dropping money from helicopters and yet no one is pointing this out. Which means we must have narrowly averted a truly horrific situation as a country. The fact that everyone keeps talking abou…

I could go for some deflation in the housing market right about now.

You can still buy a cheap fixer upper in Detroit.

Re: 83% of Americans Are Belt Tightening Due to Inflation Pressures

#89

Post by dragonwriter »

lotsofpulp wrote: post #83
dragonwriter wrote: post #78

Earlier quoted context omitted.

> Just the extra $300 per week that people were getting is causing them to be dissuaded from subjecting themselves to the bottom tier of jobs Giving people money that you take away if they work dissuades them from taking jobs, especially jobs that net them the same or less than they get without working. That doesn’t really prove anything about how giving people money that you don’t take away if they work effects thei…

It does for the low paying jobs that rely on people not having a choice. They already live on the bare minimum, but they have to clean toilets to get it. Now the government says you can live on the bare minimum, but you do not have to clean toilets. So now you have to raise wages to entice people to clean toilets. You are correct that it is not the exact same situation, but I think there would be even more disruption…

> So now you have to raise wages to entice people to clean toilets.

Or so now people doing even more distasteful and/or lower-paid work outside of the formal economy because it can stack with means tested benefits can afford to clean toilets for low wages in the formal economy because it stacks with the now-unconditional benefits. Conjecture as to which effect dominates based on behavior with additional means-tested benefits is on extremely shaky ground.

Re: 83% of Americans Are Belt Tightening Due to Inflation Pressures

#90

Post by blacksqr »

trey-jones wrote: post #74
blacksqr wrote: post #54

Earlier quoted context omitted.

GDP only dropped 2.3% last year [0], so there's approximately the same amount of stuff to buy. [0] https://www.bea.gov/news/2021/gross-domestic-product-4th-qua...

My rationale is simply that more dollars to go around means that one dollar is worth less. Simple logic, rather than fancy economics, I guess.

You explicitly blamed distribution of trillions to the populace, which I think is the conclusion the article's author wanted people to come to.

Your response illustrates the likelihood that the article is a stealth attack on government stimulus to the non-rich, to deflect the possibility of more straightforward solutions, like curtailing stimulus to the rich.

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