Why inflation can actually be good for everyday Americans and bad for rich people

they will keep up, somewhat, but, overall, inflation has to be paid by someone, and it won't be those who have huge asset accruing portfolios. The law of physics dictates you do not create concrete ( wealth ) out of nothing, it has to come from somewhere, so when the gov prints money, and distributes it, especially if done on a grand level in excess of the GDP's ability to absorb the dollars, creating a scenario where too much money is chasing too few goods, aggregate prices rise, and those who do not have asset accruing portfolios pay for it with eroded assets ( mostly dollars, wages overall tend to lag behind, and savings, goods that do not accrue ).

I kept up with it, even benefitted, because I own a house outright, but that benefit cannot be felt until I sell the house, which might not be ever.

 

Have you ever considered the fact that, for one example, when one is regularly pulling trailers with heavy loads on it, a truck is actually a very practical vehicle??

There is life beyond the city...

 

My 2 cents? This 'argument' is a bit of a stretch. Inflation is not good for the average citizen.
Sure, some will benefit from it but those hurt by it will be a much larger group. The inflation should be short term , less than a year, however in my opinion but that does depend on lower costs being passed on to the end user. Only, consumer exercising choice and manufacturer competition with however cause that to happen in the most efficient manner.

 

My pay is performance based. Not set. It has a minimum amount that I make, and a cap that I can make. Which no one goes above. I work for a small business, about 50 employees. But due to the nature of the business and how its set up my boss has the whole of the US to get employee's from. Remote working. It has a downside. Something that many aren't thinking about. And that downside is going to be taking effect here soon as, thanks to covid, more and more people go into remote working full time. Right now we're in a bubble. Those "advances" that you're talking about? That's the bubble. Once more and more employers institute remote working they'll gain the advantage because instead of just looking for local people to employ, they'll have the entire country to find employee's. Which makes employee's job much more expendable.

 

I havn't found current stats, but from 2014 there were only 35.8% of Americans who own a home and were still paying their mortgage. No stats on how far along they are/were in that mortgage, but certainly some of them were close to paying it off and would benefit little if at all from inflation.

What we're talking about here is the cost of living going down for around 30% of the US but going UP for the other 70%. Thats not good for us.

Its also worth noting that a large contributor to the housing 'boom' right now is because large corporations are buying up residential properties at an epic level right now, making up to 25% of total home purchases during early 2021. Presumably so they can rent them out... Its likely that right now and going forward, there's a lot less people in the 'own with a mortgage' category that will benefit from inflation, and a lot more renting who will suffer from inflation, especially considering that rental rates always scale up to match increasing wages.

 

Fake News. Real wages are FALLING they are not keeping up with inflation. Nice job trying to dress up the crap sandwich that Biden and the elected Dems Red Ink Orgy has unleashed on the American Worker

And it has devastated the savings rate of the American Worker.

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It hasn't been this low since the Trump Tax cut lifted the living standards of the American Worker.

 

When you have no desire to move the only thing inflation does to your house is increase the taxes. That’s not an advantage at all. If you sell your house you still have to buy an expensive one. Not everyone gets wage increases either. Inflation at a moderate rate is good, what we are seeing is not.

 

Looks like you've posted PSR, not real wages. And even if you look at PSR alone, your narrative falls apart when you actually look at this same stat over the course of past couple of administrations. Same goes for actual wage growth.

 

I look at results and you have it backwards. The rich don't eat losses; they pass them down to the poor and middle. The only one getting a raise is the tax man. You can not make the case that it inflation increases the quality of life for hourly workers. If you would like to try, Los Angeles inflation is braking records. Please show how the quality of life increased for workers there.

 

It's focused on people with long-term fixed-interest debts, of course. That would still be a lot of people, though, and it is an example of how the modern economic system can and does benefit ordinary people. With inflation comes more capability to afford and pay off existing debt.

 

Inflation lowers the cost of borrowing, lowering things like mortgages and the profits of lenders. There's a reason why it is typically the rich who are inflation hawks.

 

But you said: "ends to shift more wealth FROM the upper class to the middle/lower class. It also tends to follow job and wage growth . . . you know . . . increases in quality of life"

Wage growth does not increase the quality of life when it is absorbed by the higher cost of living. At best, it is a neutral for the worker and a raise for the tax man.

Were you able to find where the quality of life for workers in Los Angeles increased?

 

We have metrics that adjust wages for inflation. Real wages, compared to inflation, have been rising for decades.

 

Your position on this issue is inconsistent. We left off at you qualifying your statement claiming "It also tends to follow job and wage growth . . . you know . . . increases in quality of life"

Are you able to qualify your statement?

 

I just did. In the previous post. Even if we just ignore job growth (and you can't explain why you would do that), you try to dismiss the role of wage growth in quality of life by claiming (aka, just making up) that inflation has completely wiped out, if not eclipsed, wage growth. But even if we account for inflation against wage growth, real wage growth (that means wage growth accounting for inflation) has been rising over the course of the past few decades.

So, let me try again. You asked me to qualify, and I already did: "We have metrics that adjust wages for inflation. Real wages, compared to inflation, have been rising for decades."

If you want to claim that my position is inconsistent, then you either didn't read it, or didn't comprehend it.

 

The savings rate is tanking because people are using what they planned to save to pay for more expensive stuff....like everything. Food, gas, rent....you know, all those things that hurt the rich folks the most (I jest, of course).

The fact is that the Democrats have screwed over every American....and they damn sure have been screwing seniors since Obama got in office....rigging interest rates...thereby crushing fixed incomes. Those little old ladies own government bonds and CDs too, mr @Durandal .

Your party hasn't pushed them off the cliff, ya'll have pushed them off the cliff with a bulldozer and buried their arses.

If you're a senior on a fixed income, good luck voting for the people that will end up making you have to eat cat food when you run out of money. You get what you vote for.

 

I encourage everyone to read How to Lie with Statistics. One of the first lessons you learn from that book, if you want to use it to be dishonest with statistics, is how to cut off axes to misrepresent the facts. There's a reason this graph is cut off where it is.

 

Inflation and rising prices are a good thing? I don't think so!

And, who said that wages are rising? I thought the general consensus was that wages are stagnating?

And, in my new car lease, there is a condition that lets them adjust the amount of my payment upwards due to inflation, and I wouldn't be surprised if housing mortgages, in recent years, have a similar condition in the contract. An increase in value without an increase in the monthly payment? I don't think so!

So, basically, this inflation is a terrible situation with no good sides.

 

People with common sense...real people living in the real world....don't get a graph to understand that prices for everything have went through the roof. You want to believe the lying ass government, be my guest. Real inflation is 20%, imo. If the government was correct, the cheeseburger meal I was buying for 5 bucks just a decade ago wouldn't cost 12 bucks now...it'd be more like 6 bucks.

 

So we have to ignore math because it offends the fringe right? Nah, I'll stick to facts, no matter who gets offended.

 

Perhaps that is why I am asking for clarity. You said

"Inflation tends to shift more wealth FROM the upper class to the middle/lower class. "

Then

"Inflation lowers the cost of borrowing, lowering things like mortgages and the profits of lenders. There's a reason why it is typically the rich who are inflation hawks."

Why would the rich be inflation hawks when it shifts wealth from them to the middle/lower class?

I appreciate you clarifying and also want to remind you to show how workers in Los Angeles have a higher quality of life due to inflation.

 

Pro tip: an inflation hawk is someone is aggressive AGAINST inflation and wants to LOWER it. They want to RAISE interest rates to keep inflation LOW. Does that help?

 

Heh, that's what I was thinking. This entire thread is parody worthy.

 

Their higher wages don't cover the cost of pricing. Hence, INFLATION

 

Then why have real wages, compared to inflation, been rising for decades?