Is Inflation Going To Cripple The Economy ?
- Thread starter Warstud
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One thing, as humans, we think we're good at but aren't, is predicting the future. Also, we suck at understanding complex systems which is exactly what an economy is. All I can safely predict is that the people in charge of the federal government will do exactly the wrong thing. Whether or not the economy will suffer majorly or minorly in response is a coin toss.
Getting a $2 dollar raise when the cost of living goes up $3 isn't really helpful.
Better than no raise at all, as it has been for years and years and years. Tired of workers being exploited - finally they have some leverage. Good for them.
If you're only getting the raise due to the same factors that caused the inflation to begin with, that's not a benefit. It would be better if both wages and prices were stable than for stagflation to set in. In that kind of inflationary situation, prices go up faster than wages.
I lived through the 60’s, 70’s and early 80’s when inflation and then stagflation was rampant. What I see today are similarities. Increased spending, increasing taxes and a obliging government.
What many do not realize is that the government does not measure key economic statistics the same way they did back then. For comparison, the website ShadowStats measures CPI inflation the same as it was measured in 1980. Their latest report has the CPI inflation rate at 13.4%.
www.shadowstats.com
What many do not realize is that the government does not measure key economic statistics the same way they did back then. For comparison, the website ShadowStats measures CPI inflation the same as it was measured in 1980. Their latest report has the CPI inflation rate at 13.4%.
Shadow Government Statistics - Home Page
www.shadowstats.com
Are you for real? Your dollar is worth less and your purchasing power decreases even though your paycheck goes up and on top of that your increased income puts you in a higher tax bracket and yet you feel like you've won because you got a raise? The value of your savings is eaten away because at say 10% inflation every $1,000 you have in savings is only worth $900 a year later. You obviously weren't around back in the late 1970's when inflation was 13% and wage increases were nowhere near the rate of inflation. I was there and remember it well. Trust me, you don't want to relive those days. Interest rates on mortgages got as high as 16% before inflation was finally gotten under control.
Our economy is like a huge ocean going ship; it turns slowly. But our economy is strong.
The supply chain has been decimated which of course causes shortages everywhere.
Certainly some will be hurt more than others, but I believe we are moving in a better direction.
I always have to remember that I live in an area that is much different than most of America.
The supply chain has been decimated which of course causes shortages everywhere.
Certainly some will be hurt more than others, but I believe we are moving in a better direction.
I always have to remember that I live in an area that is much different than most of America.
We just need a few more rounds of stimulus checks, and everything will be peachy.
IIRC Nixon instituted wage and price controls to take impetus of runaway inflation. It was effective which is one of the reasons he was so hated. That and he was a crook.
AZjeff
$50 Site Donor 2023
On both ends of the scale. Lots of high paying tech jobs for some and incredibly high cost of living that working folks have to survive.
You are misremembering history.
Nixon implemented wage and price controls in 1971, left office in 1974, and the price controls were ended by Pres. Ford in 1974. Inflation in 1971 was 3.3%, 3.4% in 1972, in 1973 it was 8.7%, and by the time Nixon left office in 1974 inflation was 12.3%. Hardly "effective."
After 1974 inflation began to drop to as low as 4.9% right before Jimmy Carter took office. By the time Carter left office inflation had soared to 12.5%.
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US Inflation Rate by Year: 1929-2023
The U.S. inflation rate by year is the percentage of change in prices from one year to the next. It responds to business cycle phases and interest rates.
JHZR2
Staff member
Not entirely sure what that means.
My observation is that your area is a place with obnoxious prices on housing. Taxed quite a bit, high cost of living. Then to get talent some companies have to pay obnoxious salaries that arent really commensurate with what they would command elsewhere. Meanwhile, you still have the minimum wage earners, you have an abundance of junkies and homeless, and a lot of folks who have a hard time making ends meet, or who are stuck with mortgages that they’ll never pay off, keeping up with them on the glimmer that they’ll keep going up, and thus people can cash out. Folks just hope they won’t be the folks will be left holding the bag.
Obviously it is working well enough, like many other areas with obnoxious housing prices, or obnoxious taxes, or both. Places with wealth draw more people, including those who don’t have it.
Its like Manhattan. Mega high cost for nice places, a bunch of ultra high earners, but there are still tons of regular and minimum wage folks, and lots of people commute long ways. It works for who it works for.
If you have a high salary because of high costs, it’s likely there is also more discretionary income. While relatively, taxes on say, gasoline are high in CA, or NY, the reality is that the commodity price isn’t that different. The cost of materials, of cars, computers, etc,mare trucks really that much more.
When inflation comes, high earners anywhere have more discretionary to eat the cost increases. Your area, or any other such area. Places with high income and low other costs will probably fare better, because the high earners won’t be beholden to as high of taxes and real estate costs. And the companies, which can only pay the obnoxious salaries because they can, will also need to tighten belts. Thats a harder pill to swallow when the income levels and financial obligations are further out from relaity…
What it means is there is incredible opportunity here. High home prices are an opportunity to make money, but ya gotta be willing to try.
It is not for everybody.
Let's just say I know someone who was a hopeless alcoholic, dead broke and nearly done at 33. Now that person owns 3 of those houses you speak of. And that's just the beginning. Where else does that happen?
You cant pay what you dont earn to start with. Unless you think the company losing money but giving everyone a raise sustainable.
If you cant get the parts to build and ship more products -you cant cover the cost of raising pay so the very vehicle you need to actually cover the increase is not there right now.
Everyone wants more - but we aren't making more to pay them.
Most everywhere in America! It has nothing to do with geography!
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