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Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

forbes.com

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Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#271

Post by WA »

tonymet wrote: post #16

I recommend people use many different indicators to get a mental model of inflation, and you will notice that CPI does not represent inflation well. The memes of Arby’s 5 for $5 becoming 4 for $10 are more informative than the CPI numbers. Don’t let the shock at the grocery store wear off – it’s real and painful despite what the news tells you. True inflation would measure the amount of prosperity achieved per hour w…

- People lived in way smaller houses back then.

- People had only one car.

- People ate meat once per week.

- People had way fewer things in their houses.

You gotta consider increases in material possessions as well if you want to calculate inflation properly.

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#272

Post by ic_fly2 »

It should be noted that the previous formula was from before 1983 when it was changed and it was changed because it overstated inflation. So a better headline should be, academic sour about being wrong all the time uses outdated formula to calculate higher inflation number. People are angry about inflation now because they compare prices to before the pandemic, so cumulative inflation over a longer period than one year. Also given most mortgages are 30year fixed, the change in 1983 was the correct thing to do, though it could be updated to use internet data on rents more.

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#273

Post by ein0p »

Dylan16807 wrote: post #232
wakawaka28 wrote: post #230

Earlier quoted context omitted.

>So if it's actually 25-30%, that's a significant level of error but not an enormous one. Tell that to people on Social Security... They will come up short because of these "errors".

Ha ha, very funny. But seriously, there is a huge difference between "I think this metric is off by 3x or more" and "I think this metric is off by 1.4x"

Yeah, bro, very funny that the money I worked so hard to earn now buys 30% less in just 3 years. Absolutely hilarious.

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#274

Post by Dylan16807 »

wakawaka28 wrote: post #238
Dylan16807 wrote: post #232

Earlier quoted context omitted.

Ha ha, very funny. But seriously, there is a huge difference between "I think this metric is off by 3x or more" and "I think this metric is off by 1.4x"

It's not funny dude, that is a serious problem. I have parents on Social Security and I have to pay for their budgetary shortfall. Social Security in particular is supposed to be adjusted for inflation, which is one of the reasons the numbers are deliberately wrong. >But seriously, there is a huge difference between "I think this metric is off by 3x or more" and "I think this metric is off by 1.4x" I think annual inf…

> I think annual inflation is actually 10% right now and probably got up to 20% during the pandemic.

Then you're talking about a completely different situation than ein0p. You shouldn't have replied to me about it.

But I do think I misread your comment earlier, or something. Ignore the ha ha.

Is there any chance you edited it right away, or did I just utterly fail to read?

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#275

Post by TeMPOraL »

thebigman433 wrote: post #206
shrubble wrote: post #197

Earlier quoted context omitted.

You can listen to Bing Crosby's Christmas album, to the song "It's Beginning to Look a Lot Like Christmas", where the parents having 4 children (household size thus 6) is described, as an anecdotal supporting note... since it was a popular song for the masses, 4 kids was not seen as unusual.

You cant seriously be comparing actual cited stats for household size to lyrics from a song that was popular?

Why not? Stats are numbers compiled for someone at some point. A song this popular is a snapshot into how people lived and perceived themselves back then. A measurement of sorts. A disagreement between the two is a good indicator that the stats are suspect, or not the right stats to be looking at

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#276

Post by Dylan16807 »

ein0p wrote: post #273
Dylan16807 wrote: post #232

Earlier quoted context omitted.

Ha ha, very funny. But seriously, there is a huge difference between "I think this metric is off by 3x or more" and "I think this metric is off by 1.4x"

Yeah, bro, very funny that the money I worked so hard to earn now buys 30% less in just 3 years. Absolutely hilarious.

I think I misread something before I made that comment. Ignore the laughter.

But even with that mistake, I don't know why you think I was calling inflation itself funny.

-

Though, you say the "money you worked so hard to earn"...

I could interpret that as either wages or savings.

If it means your wages buy 30% less, and inflation is 30%, then your nominal income hasn't increased. If so, something has gone very wrong, and it sounds like your employer is screwing you over.

So I think you mean the savings you had a few years ago. Is that right?

But if you had a meaningful amount of savings, were none of the savings in stocks? Stocks have gone up tremendously since the peak in early 2020.

And if you had a mortgage, it would have effectively shrunk by whatever amount your nominal income increased.

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#277

Post by fulafel »

adriand wrote: post #33
tonymet wrote: post #16

I recommend people use many different indicators to get a mental model of inflation, and you will notice that CPI does not represent inflation well. The memes of Arby’s 5 for $5 becoming 4 for $10 are more informative than the CPI numbers. Don’t let the shock at the grocery store wear off – it’s real and painful despite what the news tells you. True inflation would measure the amount of prosperity achieved per hour w…

But it’s not like our standard of living has remained static while we need to work more. A lot has changed. In 1960 the average single family home was 1300 square feet, now it’s more than double that, and it’s packed with amazing amenities and entertainment options. What would an iPad cost in 1960? Obviously the question is kind of nonsensical and yet on the other hand, if you were to try and quantify the price of ou…

The opulent space per inhabitant (as families are also smaller) is now viewed by many as a negative in face of the climate crisis, not to mention the cost of housing and the resulting need to work more.

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#278

Post by [deleted] »

voisin wrote: post #178
bugbuddy wrote: post #157

Earlier quoted context omitted.

According to our experience of the last 7 years, we should expect interest rate cuts, tax cuts, and more fiscal expansion either at the same time or in some sequence. Each of them will help solve our problem. There is no fiscal conservative left in America.

> There is no fiscal conservative left in America. Truer words have never been spoken. Fiscal conservatism died with Reagan.

[deleted]

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#279

Post by lostlogin »

MathMonkeyMan wrote: post #263
MisterBastahrd wrote: post #199

Earlier quoted context omitted.

In what way was Reagan a fiscal conservative other than making the poor targets for pain? He destroyed half the social safety net in this country while running on a hideously bigoted platform and STILL ended up spending an insane amount of money compared to his predecessors. The only fiscal conservative of the past 50 years in the White House was Bill Clinton.

I saw an interview where Bill quipped "You know how we balanced the budget? We used a little thing called 'arithmetic'."

Imagine a candidate who could make a quick, sharp and accurate quip.

Out here in the wider world, American elections are more terrifying every time they come around.

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#280

Post by rayiner »

MisterBastahrd wrote: post #199
voisin wrote: post #178

Earlier quoted context omitted.

> There is no fiscal conservative left in America. Truer words have never been spoken. Fiscal conservatism died with Reagan.

In what way was Reagan a fiscal conservative other than making the poor targets for pain? He destroyed half the social safety net in this country while running on a hideously bigoted platform and STILL ended up spending an insane amount of money compared to his predecessors. The only fiscal conservative of the past 50 years in the White House was Bill Clinton.

> He destroyed half the social safety net in this country

Democrats controlled the House the whole time, so how’d he manage that?

> while running on a hideously bigoted platform

What a remarkable assertion.

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