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

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

#31

Post by blacksqr » Wed, May 26, 2021, 6:21 PM UTC

chitowneats wrote: post #17

blacksqr wrote: post #8

Earlier quoted context omitted.

The article reports that 72% of respondents said their income has not increased. So whatever trillions of dollars were created don't seem to have made it to the populace. Either the respondents are not a representative sample of consumers, in which case the article's conclusions are of little value; or something other than increased consumer spending, like supply chain issues, is causing the inflation.

Your second sentence does not follow from your first. Trillions of dollars in stimulus have allowed millions of Americans to retain the bulk of their income while not working to produce anything.

If the stimulus money only allowed people to maintain their income level rather than increase it, then the inflation pressure can't be coming from increased consumer spending.

GDP only dropped 2.3% last year [0], so there's approximately the same amount of stuff to buy.

The linked article reads to me like an incoherent attempt to scare people into thinking the stimulus was a bad idea.

[0] https://www.bea.gov/news/2021/gross-domestic-product-4th-qua...

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

#32

Post by throwaway_kufu » Wed, May 26, 2021, 6:21 PM UTC

trey-jones wrote: post #2

Wow. Who could have foreseen this? I suppose that's different from "Who could have stopped this?" Our economic problems are not easy ones to solve, but when trillions of dollars of are created out of thin air and distributed to the populace, you had to know this was coming.

Trillions were not distributed to the populace, trillions were distributed to businesses and the Fed to leverage even further to prop up the stock market. The “populace” got billions.

The printing isn’t really the problem either, it’s a symptom of policies from both parties for 50-60 years resulting in a nation that functions purely on debt from individual households, small businesses, publicly traded businesses, to the government itself.

Before the pandemic the majority of households couldn’t cover a $400 emergency. But the truth is businesses and governments were in the same position, and even in “the greatest economy the world has ever seen” the majority of them live the equivalent of paycheck to paycheck just servicing their debts.

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

#33

Post by uncoder0 » Wed, May 26, 2021, 6:22 PM UTC

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.

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

#34

Post by thrwawy12345 » Wed, May 26, 2021, 6:22 PM UTC

blacksqr wrote: post #13

halsom wrote: post #7

Earlier quoted context omitted.

Most of those trillions were delivered to the ruling/corporate class who has used it to secure assets instead of create value. That is the source of this inflation. For example: https://www.msn.com/en-us/news/us/koch-e2-80-99s-foundation-...

If so, the solution to the problem presented in the article is simple: tax the rich.

Even more simple: “fix” the problem by not creating it in the first place.

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

#35

Post by newaccount2021 » Wed, May 26, 2021, 6:24 PM UTC

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…

The government stands more to lose by a rate hike than any other individual entity. Ten year notes are traded in an open market, and sold at auction - Treasury can't just set a price and expect people to pay. If the prevailing ten year rate reverted back to the historical average of 4.9%, 30% of the Federal budget would have to be dedicated to just servicing the interest on the debt.

For Uncle Sam, low rates are about survival. We're in deep caca.

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

#36

Post by thrwawy12345 » Wed, May 26, 2021, 6:25 PM UTC

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…

> Which means we must have narrowly averted a truly horrific situation as a country.

Citation needed. I don't understand the logic here.

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

#37

Post by lotsofpulp » Wed, May 26, 2021, 6:26 PM 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.

Because the government does not want to upset the social ordering of people. So much of our lifestyle derives from the fact that those at the bottom have no choice but to work for those low wages and poor quality of life at work.

Giving them an option upends all the assumptions that go into loans, and therefore having to raise wages would cause defaults for businesses, and otherwise wreak havoc for those who currently benefit from owning those assets and debt.

A slow increase in quality of life for those at the bottom is okay, but a large increase so that they jump up a few rungs on the ladder would cause pain for those above.

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

#38

Post by tobyjsullivan » Wed, May 26, 2021, 6:26 PM UTC

blacksqr wrote: post #8

trey-jones wrote: post #2

Wow. Who could have foreseen this? I suppose that's different from "Who could have stopped this?" Our economic problems are not easy ones to solve, but when trillions of dollars of are created out of thin air and distributed to the populace, you had to know this was coming.

The article reports that 72% of respondents said their income has not increased. So whatever trillions of dollars were created don't seem to have made it to the populace. Either the respondents are not a representative sample of consumers, in which case the article's conclusions are of little value; or something other than increased consumer spending, like supply chain issues, is causing the inflation.

> something other than increased consumer spending, like supply chain issues, is causing the inflation

My (naive) understanding is these are tightly linked. The process is something like:

   => Consumers have more cash to spend on goods.
   => Consumers buy more goods
   => More demand is created for commodities to build those goods
   => Demand for commodities exceeds demand
   => Commodity prices inflate
   => Manufactured good prices inflate

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

#39

Post by oceanghost » Wed, May 26, 2021, 6:27 PM 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.

Because we have a kleptocracy-- and helping people directly gives the thieving class no opportunity to steal.

Remember trickle down economics?

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

#40

Post by mywittyname » Wed, May 26, 2021, 6:27 PM UTC

giantg2 wrote: post #22

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…

"The fact that everyone keeps talking about more stimulus means that the government knows more than we do" Like what?

The US government collects data about production capabilities of pretty much every industry in America. Major companies do talk frequently with government officials about potential problems and roadblocks the business are facing, especially internationally.

In addition, they have an enormous spy apparatus operating in probably every country on earth. Military satellites can be used to gauge production around the world. They can monitor metal mines in Australia, track the shipments of ore to refineries, and have a good idea of where the finished products are going.

Clearly, all of this information is gathered and analyzed by different departments, but analysts within the White House can obtain an absurd amount of detailed information of almost any nature.