83% of Americans Are Belt Tightening Due to Inflation Pressures • Hacker News Board

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

#131

Post by wolverine876 » Wed, May 26, 2021, 10:15 PM UTC

dragonwriter wrote: post #107

wolverine876 wrote: post #97

Earlier quoted context omitted.

The response and cause are inputs in the same system. An economy of belt-tightening is not inflationary. > silly Enough said.

> The response and cause are inputs in the same system. But not to the same state . The description is of inflation at T( n ) producing belt-tightening at T(= n ). You are complaining that the belt-tightening doesn’t explain the inflation. Of course it doesn’t. Now, sure, there’s a valid question of “what is causing the inflation”; is it offsetting belt loosening in another group? Is it supply issues? But

We are in early days with little inflation. In the sequence of time T(1 .. N), what you describe applies only to T(1). For all time T(>1), the belt-tightening is an input. If 83% of Americans are doing it, inflation isn't an issue for T(>1), in which case it's a moot issue.

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

#132

Post by whymauri » Wed, May 26, 2021, 10:20 PM UTC

tolbish wrote: post #130

whymauri wrote: post #103

Earlier quoted context omitted.

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.

Moving out is a popular and valid option, especially with how expensive on-campus meals are. Even if you move out, the school will still calculate a 1098-T based on the total cost of attendance (it might be possible to go out of your way to decline part of your scholarship, but I have no idea how this works). But yes, moving out is a way to save money (but some of that money just funnels back into paying a tax liability, lol).

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

#133

Post by dragonwriter » Wed, May 26, 2021, 11:47 PM UTC

wolverine876 wrote: post #131

dragonwriter wrote: post #107

Earlier quoted context omitted.

> The response and cause are inputs in the same system. But not to the same state . The description is of inflation at T( n ) producing belt-tightening at T(= n ). You are complaining that the belt-tightening doesn’t explain the inflation. Of course it doesn’t. Now, sure, there’s a valid question of “what is causing the inflation”; is it offsetting belt loosening in another group? Is it supply issues? But

We are in early days with little inflation. In the sequence of time T(1 .. N), what you describe applies only to T(1). For all time T(>1), the belt-tightening is an input. If 83% of Americans are doing it, inflation isn't an issue for T(>1), in which case it's a moot issue.

> If 83% of Americans are doing it, inflation isn't an issue

Since I already explained why this is wrong in my first post (and you acknowledged it in your response, but shifted your criticism of thr headline to that the belt-tightening doesn’t explain inflation even though it is consistent with inflation from other causes), I think we've come full circle here.

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

#134

Post by andrewjl » Thu, May 27, 2021, 2:21 AM UTC

uncoder0 wrote: post #33

ping_pong wrote: post #12

Economists like Bernanke have talked about dropping money from helicopters in the sky, in order to prevent deflation. What the government has done in the last year with its $10+ trillion in stimulus, is the exact definition of dropping money from helicopters and yet no one is pointing this out. Which means we must have narrowly averted a truly horrific situation as a country. The fact that everyone keeps talking abou…

I've always wondered why the government when doing these ~10 trillion stimulus to various industries just didn't give every person ~$30,000 during the last year spread out over the year. Probably because that would drive actual inflation.

How would that help businesses that saw demand drop to zero due to the pandemic? Such as airlines, hotels, and many others that supply them.

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

#135

Post by wolverine876 » Thu, May 27, 2021, 4:24 AM UTC

dragonwriter wrote: post #133

wolverine876 wrote: post #131

Earlier quoted context omitted.

We are in early days with little inflation. In the sequence of time T(1 .. N), what you describe applies only to T(1). For all time T(>1), the belt-tightening is an input. If 83% of Americans are doing it, inflation isn't an issue for T(>1), in which case it's a moot issue.

> If 83% of Americans are doing it, inflation isn't an issue Since I already explained why this is wrong in my first post (and you acknowledged it in your response, but shifted your criticism of thr headline to that the belt-tightening doesn’t explain inflation even though it is consistent with inflation from other causes), I think we've come full circle here.

> I already explained why this is wrong

Oh sorry, I didn't realize you forbade me from expressing a different opinion.

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

#136

Post by jfengel » Thu, May 27, 2021, 2:52 PM UTC

thrwawy12345 wrote: post #94

AnimalMuppet wrote: post #81

Earlier quoted context omitted.

Adding $10 Trillion should have created a great deal of inflation - much more than we see. Therefore, if it were not added, we probably would see much worse than no inflation - we would see significant deflation. That's far more ruinous than mild inflation is.

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

But you hate it when the things you sell get cheaper. That's the problem. Even if you're an ordinary employee rather than an owner, you get squeezed when the owner makes less money. Their debts remain fixed while their income decreases.

If that leads to your income being reduced (or you're downsized), you have less to spend and your contribution to demand goes down. That starts the process all over again with whatever you consume. The worst case is a "deflationary spiral" where that keeps going round and round.

It's widely thought that a small (2%) inflation avoids that spiral by encouraging people to spend their money today rather than sit on it. It slowly eats into fixed incomes, which isn't great, but in general it keeps the economy moving for those who are employed. Ideally it pumps the GDP faster than inflation, allowing us to compensate for those on fixed incomes.