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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

#121

Post by machinebun »

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.

> 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're looking at the total supply (which is true in the long term, since those dollars have to be spent eventually). However, inflation in the short term has much more to do with velocity and actual spending - if all of that money just sits in bank accounts, there will be no inflation.

So looking at the money supply in isolation will tell you nothing about the actual inflation. It's about what's happening to that money.

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

#122

Post by rejectedandsad »

whymauri wrote: post #101
rejectedandsad wrote: post #44

Earlier quoted context omitted.

Wow I feel so sorry for those elites, what more can we do to avoid such a tragedy for them?

Students with full-ride scholarships (not just at Princeton and Stanford) typically come from households making I would hardly call that elite. For many of these students, these schools are the primary mechanism for class mobility -- taxing their scholarships is a hindrance that many can't afford. At this point, college is so expensive and so much of that is taxable that work study is an accounting trick to offset th…

If they are at Stanford and Princeton, they are definitionally members of the cognitive elite already. Period, and this goes for people that are admitted at all. Considering the median income in the country for a single-earner is about $65k they don't really get much sympathy (nor should they).

They shouldn't be treated better than the people at CSULA by virtue of their "genetic superiority".

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

#123

Post by whymauri »

rejectedandsad wrote: post #122
whymauri wrote: post #101

Earlier quoted context omitted.

Students with full-ride scholarships (not just at Princeton and Stanford) typically come from households making I would hardly call that elite. For many of these students, these schools are the primary mechanism for class mobility -- taxing their scholarships is a hindrance that many can't afford. At this point, college is so expensive and so much of that is taxable that work study is an accounting trick to offset th…

If they are at Stanford and Princeton, they are definitionally members of the cognitive elite already. Period, and this goes for people that are admitted at all. Considering the median income in the country for a single-earner is about $65k they don't really get much sympathy (nor should they). They shouldn't be treated better than the people at CSULA by virtue of their "genetic superiority".

A freshman from Compton, CA or rural Alabama who goes to Stanford on a full-ride need-based scholarship is not part of the 'cognitive elite.' Second, these sorts of tax laws can apply to any school, including a UC or CSU (there will just be less taxes due to lower COA).

>Considering the median income in the country for a single-earner is about $65k

Median != 'elite'.

>"genetic superiority".

???

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

#124

Post by CarelessExpert »

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.

Just a quick correction due to a copy-and-paste error, the article quote is: "86% indicated they experience price increases on everyday goods and services."

That said, I agree, inflation isn't a problem, the rate of inflation is.

I also think folks, right now, are confusing price increases due to supply or demand shocks with inflation.

Housing, cars, computer chips, and many other products are experiencing a mix of a supply shock and a demand shock as last year's decisions to reduce production have bitten us as demand is coming roaring back and production can't be instantaneously re-adjusted for that demand.

That is causing a spike in prices that's rippling through the economy in various ways, from increases in prices of lumber to a spike in used car demand.

This is a fleeting effect that'll go on until supply chains catch up.

The problem is the outcome looks the same: price increases. But the policy response has to be very very different.

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

#125

Post by anotherman554 »

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…

At my local supermarket the price for food varies week to week depending on whether an item is on sale. For example sometimes items are "2 of 3.00" and sometimes they are 2.00 each. Unless someone is keeping records it would be hard to gauge.

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

#126

Post by mywittyname »

tmaly wrote: post #105

I always find it funny that the FED does not consider food and energy in the numbers. To the average American, if you food prices increase 50%, it is a big deal.

It's not all the funny when you consider that prices fluctuate so wildly that including them would make the numbers meaningless.

Even though they are excluded, they are still a component of other inflation factors. Food & energy costs contribute to the cost of materials & labor. So they are included by proxy in the long term.

And if you are really interested, the Fed does calculate personal consumption expenditures (PCE). See below.

https://www.bea.gov/data/personal-consumption-expenditures-p...

https://fred.stlouisfed.org/series/PCE

As you can see, long term, the trend matches that of inflation. Short term, it is all over the place.

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

#127

Post by AnimalMuppet »

machinebun wrote: post #118
thrwawy12345 wrote: post #94

Earlier quoted context omitted.

Why is deflation worse than inflation? I like it when the things that I buy get cheaper.

Deflation benefits those with savings and fixed-income and inflation benefits those with a large amount of loans - as well as making government debt easier to repay (at the expense of those with savings, treasury bonds and holders of government debt). If you have deflation together with a large debt bubble (like we have now), many people & companies will have to default. Not saying it's good or bad, but politically t…

Worse: The default process leads to people selling stuff for whatever they can get (either the debtor, trying to avoid default, or the lender, trying to recoup losses). That drives down prices, causing more deflation. This cycle destroys both people and businesses. Look at a crash in the 1800s to see how this plays out. It's horrible. It's very destructive.

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

#128

Post by rejectedandsad »

whymauri wrote: post #123
rejectedandsad wrote: post #122

Earlier quoted context omitted.

If they are at Stanford and Princeton, they are definitionally members of the cognitive elite already. Period, and this goes for people that are admitted at all. Considering the median income in the country for a single-earner is about $65k they don't really get much sympathy (nor should they). They shouldn't be treated better than the people at CSULA by virtue of their "genetic superiority".

A freshman from Compton, CA or rural Alabama who goes to Stanford on a full-ride need-based scholarship is not part of the 'cognitive elite.' Second, these sorts of tax laws can apply to any school, including a UC or CSU (there will just be less taxes due to lower COA). >Considering the median income in the country for a single-earner is about $65k Median != 'elite'. >"genetic superiority". ???

Someone from Compton or rural Alabama deserves the same treatment as any other elite that gets into HYPSM - they have access unlimited external social validation by society as smart and accomplished (because they are). I don’t understand why people don’t understand that you need to be a cognitive elite, a truly exceptional individual to get into these schools - normal people don’t get in. To emphasize, no matter your prior background you are an elite, likely on all dimensions, compared to someone that goes to University of Arizona.

If the tax implications are indeed the same for people at CSUs, it’s offensive that you used the Stanford example. It implies that normal people like me - the true 99.9% of society that hold it together - don’t matter at the expense of the people that already have literally everything going for them. I have nothing compared to them.

And yes, the people that get into Stanford are probably genetically superior to the ones at SJSU according to people like Thiel and anyone that buys into IQ having a significant hereditary component.

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

#129

Post by giantg2 »

mywittyname wrote: post #110
giantg2 wrote: post #59

Earlier quoted context omitted.

So what would they know that we don't? Hedge fund and industry analysts also pay a lot of attention to domestic and international production. Even stuff like public company shareholders meetings have a lot of insight. The issue I would be more concerned with is the overall structure of the economy. For example, only 15% of money lending goes to actual production use. The other 85% is just a house of cards that is len…

The most obvious example would be military-related. The government would know a lot more than the private sector about troop movement, ordinance production, deployment of assets (fighter jets, naval fleets), sabotage plans. Pretty much anything that is being intentionally hidden from public view by other parties is potentially known about by the government. Even things like water levels of various bodies around the w…

"private sector about troop movement, ordinance production, deployment of assets (fighter jets, naval fleets), sabotage plans"

I don't see these as playing a big role in the economy unless a fight between superpowers breaks out. The contracts for the items involved in these are generally well known.

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

#130

Post by tolbish »

whymauri wrote: post #103
tolbish wrote: post #72

Earlier quoted context omitted.

Scholarship money is tax free, since it goes to tuition, books, etc. Unless you are referring to money for housing? That is probably far more affordable of a tax bill relative to tuition.

What's happened over the last 15 years is that schools keep bumping room and board rates (at nearly 10% year-over-year, which is insane). Since anything outside tuition is taxable, that liability has been increasing. The 'income' of a full-ride scholarship student with parents making less than 25k could be 55-60k+ on paper, which then gets taxed. This leads to income that should be used for food and quality of life,…

I suppose you might live in the dorm your freshman year, but there is no reason why you need to take the most expensive housing. I paid $600 a month for my place my last 2 years of undergrad, and I would just take a few loans and/or a job.
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