Earlier quoted context omitted.
Deflation means a dollar tomorrow is always worth more than a dollar today meaning a rational person should strive to spend as little money today as possible. This eventually locks the entire economy up into a death spiral.
I'm curious to know if this is a real phenomenon that has been observed. Would you be able to point me in the direction of resources to learn more about this? The reason for my skepticism is that even without deflation, a dollar tomorrow is usually worth more than a dollar today, yet tons of people* don't save or invest much/any of their money, even if they're able to. * I'm speaking from the perspective of an Americ…
US inflation means families are spending $709 more per month than two years ago
121–130 of 327 posts
Re: US inflation means families are spending $709 more per month than two years ago
#122America should have elected Bernie Sanders.
Based on the situation in Canada today, I don't think that would be a good idea.
Pretty much every economic problem and distortion in Canada today can be directly attributed to the socialist policies put in place by the various left-wing and "right-wing" (who are still quite left-of-centre) governments over the last half-century or so.
For example, significant taxation and public debt are needed to pay for the bloated, inefficient, and low-quality provincial public health care and education systems, as well as the various government bureaucracies.
Large, unaccountable bureaucracies have resulted in there being intrusive regulation all over the place, even when it's completely unnecessary.
The high taxation, the intrusive regulation, and onerous bureaucracy make starting and operating businesses in Canada far harder than it should be.
Things that should be simple and routine, such as hiring and paying an employee, becomes a significant burden, especially for small businesses.
Ever-increasing minimum wages, which in many cases are economically infeasible relative to the real wealth that the employees would be creating, discourage job creation, and introduce economic distortions throughout the supply chain.
Excessive regulations have also made it unnecessarily challenging and costly to build homes and buildings for businesses, resulting in high property and rental costs.
The extremely high levels of immigration have only exacerbated many of the aforementioned problems.
That's all just the tip of the iceberg.
Socialist policies have been quite detrimental to Canada, and have noticeably decreased the standard of living over time.
Re: US inflation means families are spending $709 more per month than two years ago
#123As a parent with kids, I really don't know how folks are getting by with the prices of everything. I know folks who keep eating out, buying new vehicles, and even building new houses and I'm left scratching my head wondering how they afford all of this. I'm not saving nearly as much as I was years ago and I think my "lifestyle" has decreased post COVID (few vacations, eating out is a treat, gifts are for birthdays/ho…
I have been listening to plenty of "finance gurus" (i.e. my favorite is Dave Ramsey). I see (here in EU) that young people have 1-2 credit cards. I understand that in the US the number is higher. The dream for any young (female) professional at the tender age of 25 is to own a couple of very expensive bags ("because I deserve it" using credit cards of course).
Consumerism going steady. At least in the US you have the 401k. When I begin a discussion with friends/ acquaintances on "hey guys anyone got a decent EFT? I go my VOOG and SOXX all set up but I am looking to diversify further with some water, consumer, international, etc" and they look at me as if I speak some ancient language.
So.. most save minimal, invest nothing. Paycheck-to-paycheck is a big thing in the US and it is happening in the EU now.
(and don't get me started on parents of 14yo kids buying their kids the new iPhone every darn year)
Re: US inflation means families are spending $709 more per month than two years ago
#124What I don't understand is this 2% price target. Prices could go up 10% one year, and well call it a success if next year we "tame inflation" by only having our prices go up 2%. Why can't we target to get prices back down? For those on a fixed income, this is money we lost forever. We expect (and see) some prices go down every year (mainly electronics) and it works fine. But god forbid the price of milk goes down a b…
You’re supposed to be getting raises to keep up with inflation. Inflation means rising cost of everything, including your labor. What is your source of a fixed income? Even social security has cost of living adjustments. If it’s an annuity, you can get annuities that vary based on changes to the CPI. If you put a lot of money into a fixed annuity years ago, you did not properly hedge interest rate/inflation risk.
What you call "not getting a raise" is what companies called "getting a discount on labor"
Re: US inflation means families are spending $709 more per month than two years ago
#125Every year for the past 5 years I’ve gotten a “merit raise” which hasn’t met inflation, so I’m effectively making less than I was when I started at my job despite having 5 years more experience. My organization puts a negative value on experience, and the only way I can get an actual raise is to jump ship. The story of my generation. Meanwhile they complain about a hiring and retention problem. Gee, I wonder why?
I get a kick out of our local A&W that's had the usual "please be patient we don't have enough workers" sign up for at least a year, with another sign under it saying they're hiring starting at $10 an hour. I wonder why they don't have enough workers when almost every other retail business around pays 50% or more than that, and it's not like their employees would have to go through a grueling tech hiring process to j…
Because as long as they’re still able to be in business, they’ll just keep dragging along without paying more. Scale this across the economy appropriately.
Is the customer still showing up and living with “please be patient”? Then why reduce margins by paying more?
Re: US inflation means families are spending $709 more per month than two years ago
#126As a parent with kids, I really don't know how folks are getting by with the prices of everything. I know folks who keep eating out, buying new vehicles, and even building new houses and I'm left scratching my head wondering how they afford all of this. I'm not saving nearly as much as I was years ago and I think my "lifestyle" has decreased post COVID (few vacations, eating out is a treat, gifts are for birthdays/ho…
I really struggled trying to reply to this without sounding snarky and that’s not my intention.
But it’s simple numbers. They spend less than you do or make more.
Re: US inflation means families are spending $709 more per month than two years ago
#127Just out of curiosity, what are people here spending on groceries weekly? (Around 40, 50 for just me I think)
Re: US inflation means families are spending $709 more per month than two years ago
#128Earlier quoted context omitted.
>> What I don't understand is this 2% price target. It is statistical trickery and a headline number used to make people think things are OK. It is also a convenient number for COLA increase targets which make people think their incomes/pensions are going up (when effectively they are not on a real basis.) Also, as you note, we re-baseline each year and dont talk about the cumulative compounded inflation e.g., over t…
Low wage workers have actually seen the most wage growth recently. https://www.epi.org/publication/swa-wages-2022/
>> Low wage workers have actually seen the most wage growth recently.
Yes and no(?)
From the study "Real wage growth across the wage distribution, 2019–2022" shows 9% real wage growth. The "real" portion is compared to engineered inflation figures. In the day-to-day world where people pay actual prices, price increases have not be 2% or whatever CPI claims them to be, they are much worse.
We can back into rosy numbers, but the real numbers are felt by people. I'd suggest speaking to a variety of people and see how they feel. Ensure to also speak to someone on social security income. I speak to my mom and see the numbers on a weekly basis.
Re: US inflation means families are spending $709 more per month than two years ago
#129What I don't understand is this 2% price target. Prices could go up 10% one year, and well call it a success if next year we "tame inflation" by only having our prices go up 2%. Why can't we target to get prices back down? For those on a fixed income, this is money we lost forever. We expect (and see) some prices go down every year (mainly electronics) and it works fine. But god forbid the price of milk goes down a b…
>> What I don't understand is this 2% price target. It is statistical trickery and a headline number used to make people think things are OK. It is also a convenient number for COLA increase targets which make people think their incomes/pensions are going up (when effectively they are not on a real basis.) Also, as you note, we re-baseline each year and dont talk about the cumulative compounded inflation e.g., over t…
Restaurant workers are probably the biggest winners over the past three years. Their wages are a large component driving inflation.
Re: US inflation means families are spending $709 more per month than two years ago
#130Earlier quoted context omitted.
Deflation means a dollar tomorrow is always worth more than a dollar today meaning a rational person should strive to spend as little money today as possible. This eventually locks the entire economy up into a death spiral.
I'm curious to know if this is a real phenomenon that has been observed. Would you be able to point me in the direction of resources to learn more about this? The reason for my skepticism is that even without deflation, a dollar tomorrow is usually worth more than a dollar today, yet tons of people* don't save or invest much/any of their money, even if they're able to. * I'm speaking from the perspective of an Americ…
A dollar tomorrow is worth less than it is today