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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

#311

Post by freeone3000 »

vineyardmike wrote: post #177
randomdata wrote: post #41

Earlier quoted context omitted.

> In other words you had 1 man working 50 hours a week afford a house... With inflation, we want to know about the change in value of the dollar only . We don't want to factor in the change in value of houses, food, etc. There is a place for understanding that too, but inflation is not it. Something like a cost of living index is more suitable to that kind of information. On that note, houses are unquestionably more…

> houses are unquestionably more valuable today… They also have better insulation and construction, they’re all wired for electricity and plumbing, they all have advanced HVAC. Fancier kitchens with more plumbing, appliances and nicer materials. People have access to more furniture and fixtures and appliances to fill more home - no one needed laundry rooms before a washer/drier was invented. Few had garages. Don’t le…

Have you seen the price of land recently? It’s more than half the price of construction! Mud hut, pole barn, unserviced cabin, what-have-you, the land is going to be a major and significant expense.

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

#312

Post by buran77 »

Rinzler89 wrote: post #307
imtringued wrote: post #282

Earlier quoted context omitted.

Greek austerity imposed by Germans had resulted in the doubling of debt as percentage of GDP.

Which Germans imposed Greek austerity? AFAIK Greek austerity was imposed by Greece's major creditors, but Germany was only one of many.

Between Brussels and Frankfurt (EU institutions I mean) the general consensus was that the Greek situation was more akin to loansharking than anything else. And Germany was undeniably the largest driving factor behind this approach, and the country that most benefited from it.

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

#313

Post by silverquiet »

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'."

That one of the two American political parties believes they can lower the deficit by cutting taxes (primarily for the wealthy but that's immaterial to the basic math here) has always created some sense of unreality for me; I really no longer understand what the goal is for many of these people and I often think that they don't really know either. It's almost pure nihilism except when it comes to lust for power.

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

#314

Post by Rinzler89 »

buran77 wrote: post #312
Rinzler89 wrote: post #307

Earlier quoted context omitted.

Which Germans imposed Greek austerity? AFAIK Greek austerity was imposed by Greece's major creditors, but Germany was only one of many.

Between Brussels and Frankfurt (EU institutions I mean) the general consensus was that the Greek situation was more akin to loansharking than anything else. And Germany was undeniably the largest driving factor behind this approach, and the country that most benefited from it.

But what was the better alternative for Greece?

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

#315

Post by PM_me_your_math »

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.

[dead]

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

#316

Post by [deleted] »

ein0p wrote: post #52
ejstronge wrote: post #42

Earlier quoted context omitted.

> Those aren’t fancy cuts or prime grade beef. Just regular steak... I don’t know how the low income families deal with a 30% increase in their grocery bills I don't think low income families are buying steak - and price increases in luxury goods can understandably grow faster than in staples like non-steak beef.

But _all_ cuts of beef went up by a lot as far as I can tell. So did chicken, fish, and all other sources of protein. It’s not just protein though, everything across the board is on average 25-30% more expensive now than it was 3-4 years ago. A cart of foodstuffs that used to cost $100 give or take is now $130-140. This isn’t some Whole Foods kind of situation, this is a run of the mill Kroger normal people shop at

[deleted]

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

#317

Post by zarzavat »

ta1243 wrote: post #293
4death4 wrote: post #142

Earlier quoted context omitted.

The average household also includes empty nesters and people who have moved out yet haven't started a family yet. The average number of children per family in the 60s was 2.3, which means quite a few families had 3 or 4 children.

Far more divorced now too, so more demand on housing, and more people want to live in cities than in the 1960s, leading to even more demand. It all comes down to the cost of housing, at least in the UK where housing has been ridiculous for over 20 years. That housing is driven up to soak all available income by artificially constrained supply. All available income has increased on a household basis because of egalita…

We’ve replaced a world in which women are forced to stay at home with a world where women are forced to work until 70 (or whatever the retirement age is in your country). Great if you’re an exec or have some mentally stimulating job, but for the typical woman it means stacking shelves until your back gives out. What an achievement for society.

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

#318

Post by HarHarVeryFunny »

caesil wrote: post #37

I don't really understand the argument at the heart of this article, which is "we should include interest rates in CPI". How do interest rates effect everyday people exactly, other than price inflation on goods and services (which is included separately in CPI)? The only way seems to be interest rates on personal loans and mortgages. So if anything, we should only include interest rates in proportion to how many peop…

Mortgages aren't some small detail distorting the numbers. They make the difference between being able to afford a house or not. Having to live with your parents vs being able to buy a house and start a family of your own.

I was lucky to buy a house 10 years ago, and got a 3.5% fixed rate mortgage. Today the house value has gone up by 50%, and mortgage rates are about double at 7%. Just due to the mortgage increase alone, someone buying this house today would have a monthly payment about double what I am paying. I would not be able to afford it. On top of the mortgage rate increase, there's also that 50% inflation in the value of the house, meaning that if it sold today the new buyer (assuming they financed it) would be paying closer to triple (150% x 200%) what I am.

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

#319

Post by tarsinge »

michaelt wrote: post #301
TeMPOraL wrote: post #269

Earlier quoted context omitted.

That's missing forest for the trees. The more important part is that average 3.7 people household was a single-income one . I would rather disagree with GP's: > My point is that inflation isn’t abstract and it isn’t a law of nature. It’s a deliberate approach to stealing your prosperity while you cheer it on. A lot of the inflation, including how suddenly a single-income household isn't a viable option for most peopl…

> That's missing forest for the trees. However, when a person is making a post saying "don't trust those dodgy manipulated numbers" and offering alternative numbers, their post is a lot less convincing if their numbers are also dodgy

I didn’t get they said the numbers were dodgy or manipulated. Don’t make the typical straw man when discussing inflation that people challenging the current formula for CPI are challenging the underlying data and so are conspiracists. The point is the relevance of the indicator. In fact the very article is about a different value if we take an older formula.

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

#320

Post by Amorymeltzer »

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…

>Remember in 1963 only the man was working

Others have pointed out the flaws in the rest of this, but the labor force participation rate of Women[1] was around 33% in 1950, 38% in 1963, and 60% in 2000; it's 57% now. That's a huge change, but 1963 is a far cry from 0%. See also men[2].

As noted elsewhere, this ignores race. Compare white women under 20 https://fred.stlouisfed.org/series/LNS11300029> to black women under 20 https://fred.stlouisfed.org/series/LNS11300032>; dramatically different numbers.

Labor force participation rate isn't ideal, but it gives the picture.

1: https://fred.stlouisfed.org/series/LNS11300002>

2: https://fred.stlouisfed.org/series/LNS11300001>

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