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US inflation means families are spending $709 more per month than two years ago

cnn.com

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Re: US inflation means families are spending $709 more per month than two years ago

#231

Post by lotsofpulp »

Dig1t wrote: post #204

It seems like this might be a new form of taxation. Instead of taxing people directly, which requires voter approval and creates bad press for the politicians involved, why not instead just create the money you need and pass the costs down to taxpayers in the form of inflation? It is the worst kind of tax though because it affects the poorest people the most, since rich people have their assets that rise with inflati…

Devaluing currency (and promised benefits) is not a new form of taxation. My grandparents used to tell me the the things they bought with eights of a penny. Social Security retirement age and benefit formula “bend points” have been repeatedly altered to reduce the value of the benefit.

Re: US inflation means families are spending $709 more per month than two years ago

#232

Post by ghaff »

sangnoir wrote: post #220
itake wrote: post #15

Earlier quoted context omitted.

> my stock income My investment portfolio profits (or RSU vests or bonuses) never make their way to my checking account. Are people really dipping into their investment accounts to cover living costs? Maybe for home or car purchases?

> My investment portfolio profits (or RSU vests or bonuses) never make their way to my checking account That's your choice[1]. Some people sell upon vesting, and others liquidate periodically or to make down payments on property or health emergencies instead of going into debt. I suppose if one had a rainy day fund and the value of their RSUs doubled over one year, they may be tempted to spend the emergency fund sinc…

Living through dot-bomb made me very conservative about holding options/RSUs. I won't say I haven't held them at all (and more recent history I'd have been better holding more) but in general better to take the cash.

Re: US inflation means families are spending $709 more per month than two years ago

#233

Post by jonhohle »

xenospn wrote: post #21
silisili wrote: post #10

Earlier quoted context omitted.

Same. I make decent money and used to save thousands per month. Now I'm lucky to stash away high hundreds a month, but any expense like new brakes wipes that out. I wonder how in the world everyone else is getting by. Maybe we're all just smiling and pretending here...

I live alone and just realized I’ve been spending $1300/month this year on groceries. For one person.

As many other have pointed out, that seems bonkers. We’ve spent $1,128 in the past 30 days for 6 people and that includes back-to-school supplies, some sports equipment for fall sports. We buy mostly organic fruits and vegetables, milk, beef, and chicken and have a meat protein in every meal. Even that seems absurd. We use Costco for everything we can, a weekly trip to Walmart to fill out the smaller things, and Sprouts for veggies and fruit.

If you’re paying that much for groceries, one trip to Costco or Sam’s Club will probably pay for the membership.

Re: US inflation means families are spending $709 more per month than two years ago

#234

Post by AndrewKemendo »

candiddevmike wrote: post #4

As 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…

Single Father of three here. I’m not swimming in debt but I’m definitely reducing my spend every month significantly.

The price of meat is going wild - on track to double this year

Re: US inflation means families are spending $709 more per month than two years ago

#235

Post by AtlasBarfed »

tmountain wrote: post #46
bko wrote: post #17

What 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…

Governments are afraid of deflation (prices going down) because consumers can go into a holding pattern (stopping spending while waiting for prices to continue to decrease) which can cause the economy to stall out.

Well personally I'm cutting out as much consumption as possible, how is inflation not resulting in big drops in people spending?

You know what causes a downward spiral? People stop buying things, sales drops, layoffs / cuts, people buy less, etc.

I see companies freak out over 1-2% drops in sales, how is inflation not causing people to drop consumption by 10%? I don't travel, I'm eating out WAY less, I am price/bargain hunting far more. I never buy gas without gas price map checking. I'm holding back on as much purchases as possible. I don't even think about buying any clothes not on sale. Hell, I basically don't buy clothes unless absolutely needed.

Re: US inflation means families are spending $709 more per month than two years ago

#237

Post by coolbreezetft22 »

VancouverMan wrote: post #122
kevmo wrote: post #18

America 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 bloate…

I just got back from visiting my family in a mid-sized Ontario city and it seems pretty great to me. All of my close friends from high school own homes close to where they work, even the ones who didn't go to university/college. A ton of homes were also actively under construction. Everywhere I drove there were new retail businesses and signs for jobs/hiring. Overall it just seems much more balanced than Seattle where you need to be a dual income tech couple to afford a home

Re: US inflation means families are spending $709 more per month than two years ago

#238

Post by mahogany »

dualityoftapirs wrote: post #225
mahogany wrote: post #97

Earlier quoted context omitted.

Is there any evidence that modest deflation actually causes this "holding pattern" in the overall economy? I see this theory stated a lot for the reason that deflation is bad, and it definitely checks out on a basic logical level. But economics is complex right? So I'm curious what the evidence is in the real world. I can imagine this happening with large deflation (10%, say), but what about 2% or 1%? It's not obviou…

It's more the bigger investments that drive a lot of the economy that are the concern - think real estate and stocks. Why buy a $1 million home today if you'll be able to buy it from $980k next year, and maybe $965k the year after that? More importantly, why continue paying the mortgage on your million dollar home when it's likely never to be worth a million again? Why buy 10,000 shares of a company now, when in a fe…

That's fair - but that is assuming indefinite long-term deflation. What about intermittent modest deflation as a tool to bring prices down? It seems that just the idea of deflation is immediately rejected in any conversation about monetary policy.

Also, I think in the real world today, a home would still sell in a deflationary environment, given serious supply shortages. Especially for those buyers which are looking for a home and not an investment (investors would lose long term in a deflationary environment, as you say). Couldn't temporary, modest deflation actually open the housing market up for those "real" buyers primarily looking for a place to live?

Re: US inflation means families are spending $709 more per month than two years ago

#239

Post by zeroonetwothree »

gruez wrote: post #65
qbasic_forever wrote: post #38

Earlier quoted context omitted.

Goooooooood luck driving off a dealer lot with a $22k Toyota! Seriously, if you can do it then good on you! But back in the real world the on the lot availability of cars is abysmal and most makes are sold out for months of backlog. Like if you want a Toyota minivan it's something like a 2 year wait--unless you are willing to buy one on the lot with a $10k dealer markup.

In other words, it's actually available for $22k. You just get it right now . That seems... fine? I guess it sucks for the people who need a new car in the past 2 years, but given that the average age of cars on the road is around 12 years, that's a small fraction of people. It certainly doesn't support the original claim that $30k cars are the reason why people getting in debt.

I just checked and my local dealer has a Corolla in stock for $28k. That seems consistent with other people in this thread.

In 2018 I bought a top end accord for $31k. So prices are definitely much worse now.

Re: US inflation means families are spending $709 more per month than two years ago

#240

Post by zeroonetwothree »

spiderice wrote: post #146
eurleif wrote: post #93

Earlier quoted context omitted.

Your link says it's a paraphrase rather than an exact quote. It still represents his sentiment accurately. But quoting Henry Ford, particularly his views on nefarious bankers, is a pretty questionable choice considering what he had to say about Jews.

This is a logical fallacy. His view on Jews has no effect on whether his statements on nefarious bankers are true. You can quote me saying 1+1=2, even if 2 is my favorite number. Now if he’s being misleading and you have evidence of that, then his feeling toward Jews might explain why he is biased

perhaps you aren’t familiar with the idea that Jews are the nefarious bankers

It’s likely that was at the heart of Ford’s statement

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