Tax on the poor?: What's the cause of USA inflation?

[Hawaiian]

18 minutes ago, thaibeachlovers said:

If government functioned properly 70 % of the bureaucrats would have to get a proper job that pays less.

If the regulations that add unnecessary costs didn't exist entire departments could be closed.

What a beautiful thought, for the taxpayers, that is.

[Ben Zioner]

17 hours ago, GammaGlobulin said:

What’s the cause of rampant inflation in the USA?

Well, between 2020 and 2022 all countries got their central banks to issue tons of money  while their economies were a s stand still. Painful corrective measures become necessary to stop such trend, these are always sluggish as governments want to be reelected.

 

Hope you don't see that as esoteric. It would be if I said that COVID was invented to cause this. But then I should be stopped from posting.

[Hawaiian]

47 minutes ago, thaibeachlovers said:

On that I agree 100%. The world functioned reasonably well, at least for western countries when world population was about 3 billion. It's now 8 billion and rapidly increasing. That might not matter except for the fact that AI robotics is going to remove the work that most of them do when they illegally enter western countries. I see nothing but societal chaos when that <deleted> hits the fan.

IMO it's going to get really nasty and there is no telling what the human world will look like when it's over.

Looks like wars, famine and pestilence are not doing a proper job.

[altayvan]

16 hours ago, Dcheech said:

Jesus Wept.

 

Have you not noticed inflation in Thailand? You have not noticed that worldwide inflation bedevils countries from China to Canada, Albania to Argentina today? Next rhetorical question,  did you notice another worldwide event in the last five years, something besides the ever-growing WOKE menace.  ...... Say a Virus?

Every country in the world was pumping money into their economy to keep it chugging down the road and not spiral into recession/depression. When confronted with a pandemic, or lockdown, like the recent worldwide virus originating in Wuhan China. Countries pump money into the economy to keep people spending, to keep the economy from locking up. The by product is inflation and yes it is worldwide. NOTE recent US campaign rhetoric aside (as in Bidenomics) Trump started doing exactly this in his last year, 2020. No real choice, it is the only economic answer that might work. Biden continued it. This is a no brainer as only one economic theory works in these conditions  - just deal with it - 'Keynsian economics'. as true today as it was in the 1930's and one that conservatives and liberals use. Conservatives just don't like to talk about it, but they use it. 

Recession/Depression - or - Inflation?

It is not even a choice GG

 

 

Argentina actually has its inflation under control, which probes it was all due to corruption and a lack of political will. They are a grain exporting country and the fluctuations where used to export more

 

 

[mdr224]

OP should make a new thread about what people should be talking about, what is the SOLUTION to inflation. Talking about the cause doesnt help anybody, nothing anyone here can do about that 

[Hawaiian]

10 hours ago, Walker88 said:

tl:DON'T r

 

Oh, it’s not so simple. EVERYTHING is connected.

 

There are always poor and always will be poor. The world has lifted billions out of poverty, so that in most countries being poor is a lot more comfortable than it was 500 years ago. The gimmick the world collectively agreed on was fiat money. Print money now, and it lifts people up, either through a social safety net or because an entrepreneur borrows this printed money and starts a business that employs people. All well and good.

 

The problem arises when debt has to be repaid. The way the world addressed that was to gear economies to an “acceptable” level of inflation, which for the US Fed is 2%. That allows debts to be inflated away, or at least get serviced, which is good enough. Nobody thinks sovereign debt will ever be repaid.

 

Now that system requires lots of fine tuning, along with a good deal of luck. Absent a Black Swan event, or else leaders who abuse the privilege of conjuring money, it works for a long time.

 

Covid was a Black Swan. Folks can argue it was handled poorly, but the fact is as it arose, nobody knew how severe it might become. Once nations decided to shut down, money printing had to go into overdrive. That has resulted in inflation, exacerbating the abuse of the money printing privilege leaders have.

 

In the US, we had both. The tax cut for the wealthy---about the only “accomplishment” of the two years when Republicans controlled the House, Senate and White House....just added debt. In the 4 years from January 2017 to January 2021, $8,400,000,000,000 was added to the US National Debt. That equates to $25,000 for every man, woman and child in the country, or $1000 for every person on Earth. That is a lot of spending power, and all those trillions chased goods and services, resulting in the inflation the US experienced. Most of the rest of the world did the same thing, so inflation was worldwide.

 

Politicians or wannabe autocrats know the average person is dumb, and nether understands economics nor that correlation does not equal causation. If inflation is today, then the blame goes to whomever happens to be in charge today. Also, when someone claims “only I can fix it”, people want to believe. There is precious little link between anything Biden did and the inflation that was present when he was in the White House, nor does the POTUS elect have the slightest clue about how to address it.

 

Now sometimes things settle down on their own, or with a boost from Fed policy. US inflation peaked at 9%, and is now running about 2.7%, less than most nations. Inflation, however, is a measure of ALL prices, and the index is based on a theoretical basket of goods and services the average consumer might use. People tend to see only one thing---such as the price of eggs---and extrapolate that over everything to arrive at a false idea of overall inflation. Yes, egg prices are up, but guess what’s down? Fuel. Rent, at least rent relative to home ownership, is also down. In fact, it is now 35% cheaper to rent than buy a home in the US.

 

A good deal of inflation results from cheap money chasing assets. The last decade or so has seen the elite accumulate a much higher percent of assets in all economies. The qini coefficient is on the rise everywhere. That puts pricing power into the hands of the elite, who can then impose their own wants on to the masses.

 

I am not of the opinion that things will get any better, because society has much less need for the number of people it has. Many of the things that have benefited economies in the last few decades have been stopgap solutions to an intractable problem. Debt soared in order to make work for the masses. In the US, access to home equity allowed the middle class to live above their means. That also required key asset prices like homes to remain stable. In 2008 a bubble burst, and that threw everything into a period of madness and decline…until ZIRP, or free money for years on end. That ran its course when inflation finally arose.

 

The can has been kicked down the road for years, and maybe it can continue to be kicked. I think not. Human labor is increasingly losing its pricing power, and there are fewer stopgap measures to support those who need support. Debt levels are too high, and central banks are stuck between a rock and a hard place: if rates stay low, inflation will jump….if rates rise, debt service becomes more difficult. Each 1% upward shift in the US Yield Curve adds $360 billion per year in the budget deficit. Despite the US being viewed as the worst offender of debt, very few major economies are any better, and most have a worse debt-to-GDP ratio. Japan is the worst. In Europe, maybe only the Netherlands has a decent ratio; the rest top the US'.

 

Hard choices must be made, and those making the choices tend to think of themselves first, so it isn’t going to get any better for the masses. Cut government spending, and the masses suffer. Keep spending, and inflation hurts….the masses.

 

So inflation has not been a “tax on the poor”. It is a consequence of measures taken to lift the poor from poverty, in contrast to what the poor experienced from Oldavai Gorge until maybe the Marshall Plan or Lyndon Johnson’s Great Society.

Not to argue, but most items that have seen inflated prices are because of government action or inaction, directly or indirectly.  The high price of eggs being one exception, culling of flocks because of bird flu.

Otherwise, an excellent explanation.

[soalbundy]

19 hours ago, GammaGlobulin said:

Dear Fellow Sufferers,

 

What’s the cause of rampant inflation in the USA?

 

Please don’t quote me esoteric Economic Theory.

 

We ALL know that Economic Theory is mere Mumbo-JUMBO, with a capital J.

 

And, there are those, such as that High-Priestess Greenspan who spout all sorts of Mumbo_Jumbo, just to favor one group over another group, especially in the USA.

GreenSpan:  Genius or Economic Twit?

 

a. So why must we suffer the likes of Greenspans?

b. Is inflation nothing more than a tax on the poor and middle class?

c. Why can’t we poor buy Picassos and Van Goghs, so that we, too, like the rich, may become inflation-proof?

 

Need to know!

Because, at this rate, things just might continue to deteriorate.

 

Regards, but not BEST regards,

Gamma

 

Note:  What do YOU think will be required for the USA to become a much more egalitarian and just society, one in which the common man may thrive in this “Home of The Brave” we once truly enjoyed?

 

Credit cards, buying things you don't need with money you don't have, it's the American way of life.

[wombat]

inflation started when manufacturers took industry to other countries with cheap labor so the same product could be sold in America for more money and more profit while the closure of American factories began the unemployment spiral.

[wombat]

3 hours ago, mdr224 said:

what is the SOLUTION 

bring all the industries that bailed for o/s back and start again

[ericbj]

In brief:  "Money-printing".  Increases in money supply outstripping increases in assets (goods and services).

 

In detail, see here:
 "The global economy is a pyramid scheme |
 End of the Road (full documentary)"
https://youtu.be/6F7h1VJGp8w

[AgMech Cowboy]

On 12/29/2024 at 1:29 PM, GammaGlobulin said:

We ALL know that Economic Theory is mere Mumbo-JUMBO, with a capital J.

Well, if you feel that way then you're not going to understand anything. But, try this.
www.youtube.com/watch?v=6jIYro6BGDs

(You'll need to copy the link and past it into your browser).

On 12/29/2024 at 1:29 PM, GammaGlobulin said:

What do YOU think will be required for the USA to become a much more egalitarian and just society, one in which the common man may thrive in this “Home of The Brave” we once truly enjoyed?

Work hard, don't spend more money than you make. Decide what you want to do in life and educate yourself to be able to do it. (apprenticeships are education). 
I didn't know what I wanted to do until I was 21, but my parents had made me go to college.  Luckily I had chosen to study for a BS in Technology, which enabled me to get a foot in the door. Then I continued to train, work in 'the field' and take industry courses to reach the work requirements for what I wanted and did.

[gearbox]

21 hours ago, Jingthing said:

It's basically hopeless.

An American politician can't even whisper economic inequality without being red baited.

https://www.cscc.it/upload/doc/benessere comune.pdf

 

"We should not aim too high and make
promises that cannot be fulfilled. Instead of taking on everything, the government should
focus on carrying out programs that are general, inclusive and guarantee basic needs. Even
if we become more developed and financially stronger in the future, we should not set
excessively high goals and provide excessive guarantees, in order not to fall into the trap of
“welfarism” that encourages laziness"

 

Xi Jinping, the greatest leader of our times. On the contrary the western leadership degraded so much in the last 30 years, if the trend continues I can't imagine what species are going to govern us next.

[GammaGlobulin]

8 minutes ago, gearbox said:

if we become more developed and financially stronger in the future, we should not set
excessively high goals and provide excessive guarantees, in order not to fall into the trap of
“welfarism” that encourages laziness"

 

Why is it that it's usually our fearless leaders who so often talk about this "Trap of 'Welfarism'"?

 

 

[donmuang37]

On 12/29/2024 at 1:29 PM, GammaGlobulin said:

Dear Fellow Sufferers,

 

What’s the cause of rampant inflation in the USA?

 

Please don’t quote me esoteric Economic Theory.

 

We ALL know that Economic Theory is mere Mumbo-JUMBO, with a capital J.

 

And, there are those, such as that High-Priestess Greenspan who spout all sorts of Mumbo_Jumbo, just to favor one group over another group, especially in the USA.

GreenSpan:  Genius or Economic Twit?

 

a. So why must we suffer the likes of Greenspans?

b. Is inflation nothing more than a tax on the poor and middle class?

c. Why can’t we poor buy Picassos and Van Goghs, so that we, too, like the rich, may become inflation-proof?

 

Need to know!

Because, at this rate, things just might continue to deteriorate.

 

Regards, but not BEST regards,

Gamma

 

Note:  What do YOU think will be required for the USA to become a much more egalitarian and just society, one in which the common man may thrive in this “Home of The Brave” we once truly enjoyed?

 

Gamma, Groan! Go take an economics class so you will understand - it's NOT mumbo jumbo!  And ignorance is not bliss!

[GammaGlobulin]

38 minutes ago, donmuang37 said:

Gamma, Groan! Go take an economics class so you will understand - it's NOT mumbo jumbo!  And ignorance is not bliss!

 

Thusly spoke my main-Man, Zarathustra.

 

[thaibeachlovers]

20 hours ago, donmuang37 said:

Gamma, Groan! Go take an economics class so you will understand - it's NOT mumbo jumbo!  And ignorance is not bliss!

Tell me why, if economists understand economies, why our economies are always so bad?

 

They may understand them, but they never make them work for the benefit of any but the rich.

[thaibeachlovers]

23 hours ago, GammaGlobulin said:

 

Why is it that it's usually our fearless leaders who so often talk about this "Trap of 'Welfarism'"?

 

 

Perhaps because giving people capable of working for a living enough money to not need to work does not encourage people to work.

Welfare should only be for people that are physically unable to work.

 

That is the "trap".

[Hawaiian]

14 minutes ago, thaibeachlovers said:

Tell me why, if economists understand economies, why our economies are always so bad?

 

They may understand them, but they never make them work for the benefit of any but the rich.

Their theories work until they don't.  Like Keynesian Economics and the Laffer Curve.

[jas007]

On 12/29/2024 at 4:47 PM, Lacessit said:

Too much money chasing too few goods and services.

 

I'm sorry, that's about as non-esoteric as I can get.

There are different types of inflation.  What you're describing is called "Demand-Pull" inflation.  There can also be "Cash-Push" and "Wage-Price" inflation.  

 

In my mind, it all starts out with an increase in the money supply.  Either by way of government spending or by way of the banking system. 

[GammaGlobulin]

3 hours ago, Hawaiian said:

Their theories work until they don't.  Like Keynesian Economics and the Laffer Curve.

 

a. This is understandable, since Economics is not science, but religion, based on belief.

 

b. All Economic theories work, when the economy is expanding rapidly, and when inflation is low and not rising.

 

c. Economists love to take credit for things that they do not control....like priests or....GOD even.

 

[GammaGlobulin]

4 hours ago, thaibeachlovers said:

Tell me why, if economists understand economies, why our economies are always so bad?

 

They may understand them, but they never make them work for the benefit of any but the rich.

 

What we really need around here is more quants.

They know what's happening.

 

Next life, I will become a quant.

 

[Lacessit]

51 minutes ago, GammaGlobulin said:

 

What we really need around here is more quants.

They know what's happening.

 

Next life, I will become a quant.

 

Working on the principle if you can't beat them, join them.

 

There was a CEO of BHP, Brian Gilbertson. He could solve Black-Scholes equations in his head. Scary.

[hydraides]

The cause?

 

Completely Orchestrated to squeeze the middle class. 

 

So they can push through the one world digital currency within the next 5-10 years

 

Everything will become so expsensive.....its going to become 10x worse during the next economic crash/depression,

 

Then will offer world digital currency and one world government as the solution to problems , they themselves created. Humanity will then be complete slaves to one world government and will have follow everything they say (take this vaccine etc, put this chip in your brain)

 

If you think its impossible its not, you would have said its impossible for the western world to shut down for 2 years, where we weren't allowed to travel without a vaccine certificate and weren't even allowed to work without a vaccine certificate

[GammaGlobulin]

1 hour ago, Lacessit said:

Working on the principle if you can't beat them, join them.

 

 

Exactly.

Welcome to Reality!

There is no God, anyway.

So, what are we worried about?

 

 

Except, when there is no God, still there should be a moral social good.

Except, there is not.

 

Human nature is deeply flawed, and once the tribe numbers more than the size of a gorilla troop, the rules change. And things fall apart.

 

Can't be helped, really.

 

 

[Hawaiian]

On 12/29/2024 at 12:48 AM, pomchop said:

Greed....fueled by too many people that do not know the difference between what they need and what they want.

Not really sure how much greed contributes to inflation, but greed is becoming more than obscene. 

Bloomberg reports that 500 of the world's richest people now have a combined wealth of $10 trillion.  Some of this wealth consists of intangible assets that can appreciate (or disappear) overnight.  Would that be considered inflation?

[Presnock]

On 12/29/2024 at 2:54 PM, KhunLA said:

Pure GREED & control ... and reason for most of it IMHO

... healthcare, beyond silly priced

... fossil fuel ... wind fall profits ... nuff said

... Tax, nothing but corruption (defense) & waste

... RE, pure greed, and BlackRock will own everything soon

You got that right!  big busineses had record profits once the pandemic subsided - govt financial folks inidcate that inflation has subsided yet pharmas and big stores have yet to lower their prices so...while the rich pumped millions into Trump's campaign when he promised for tax relief for the rich, they would rather give the millions to Trump than to the government or to their working stiffs so now we see strikes where the workers are hoping to garner some of those profits.  The really poor and many previously in the middle class now can never achieve the so-called life dream (home ownership) as housing is way overpriced for the regular hourly earner and the homeless numbers increase yearly in double digits one natl news channel said that in 2024 homeless number increased 18%.  Meantime, taxes have to be raised to take care of the open-border illegal immigration hordes since the government pays for their housing, food, clothing and schooling.

[Lacessit]

10 hours ago, GammaGlobulin said:

 

Exactly.

Welcome to Reality!

There is no God, anyway.

So, what are we worried about?

 

 

Except, when there is no God, still there should be a moral social good.

Except, there is not.

 

Human nature is deeply flawed, and once the tribe numbers more than the size of a gorilla troop, the rules change. And things fall apart.

 

Can't be helped, really.

 

 

You don't believe there is a God. I'm agnostic.

 

You believe you will be reincarnated as a quant, or hope to be.

 

Not disputing your lack of belief in a God.

 

How do you justify your belief in reincarnation? What is your evidence?

 

Happy New Year.

[cjinchiangrai]

Another clueless rage post.

[GammaGlobulin]

5 hours ago, Lacessit said:

You don't believe there is a God. I'm agnostic.

 

You believe you will be reincarnated as a quant, or hope to be.

 

Not disputing your lack of belief in a God.

 

How do you justify your belief in reincarnation? What is your evidence?

 

Happy New Year.

 

I cannot justify my plan to be a quant in the afterlife.

I do not believe in an afterlife.

So then, regarding my plan to become a quant, that ship has sailed.

 

[Sheryl]

AFAIK the inflation has not been unique to the US, but rather has occurred pretty much everywhere. Certainly has in UK. And in Thailand.

 

So looking for US specific causes may be a mistake.

 

As near as I can tell, prices soared during  and immediately after COVID due to supply chain problems/bottlenecks followed by a spike in fuel prices initially after start of the war in Ukraine.

 

However after these factors resolved, prices either failed to come down, or came down only slightly.  Presumably because key actors felt that why charge less once people were already paying more.

 

incidentally inflation rates in US have slowed considerably.  https://ycharts.com/indicators/us_inflation_rate.  Peak inflation was in 2022 - due to exactly the factors mentioned above, and happening worldwide.  But a slowing of inflation rates, even to below normal average rates, is not the same thing as prices dropping back to what they once were. It just means they stop going further up rapidly.