We Can’t Stop Inflation without crashing the economy

Of course

 

Spoken like a true democrat would preach, you cold wear a coat, not enough food, eat one less meal, can't afford gas, ride a bike

 

Keep it going. I'm going to increase my cryptocurrency and assets

 

That's not true.

Inflation was due to QE ("quantitative easing" the economists term for printing fiat currency faster than GDP can absorb it) of Trump's and Biden's stimulus packages, which was 50% of it, and the other 50% was due to the fact that foreign suppliers, their respective countries lagged a year behind us on control over Covid, causing shortages in foreign supply chain, which resulted in higher costs in the US Economy. In short, the prime mover of this inflation is the pandemic, and it won't last forever, and we won't even have to raise interest rates to lower inflation, it will settle on it's own.

Kevin O'leary, the billionaire of shark tank, explains:

 

reagan doubled the fica tax on the working class. this is the most regressive tax in a system of regressive taxation. cutting the capital gains rate dod little to help those of us hurt by fica.

the high interest rates under carter were necessary to control inflation. like everything in macroeconomics there is a time delay.

finally, the "great economy" attributed to reagan resulted from massive deficit spending.

 

iow live within your means - an old american, and christian , tradition.

 

Ya that's it, but it's the leftist way from my POV!

 

The FICA tax is going to have to go up a lot more to keep Social Security solvent. I can't believe you would sink the Social Security program just because you don't want to pay FICA taxes.

 

I totally agree.
Stop trying to manipulate the economy and let interest rates be what the market wants them to be.

 

Another politically uncomfortable but very rational option might just be to reduce benefits.

The inclination of the Left of course is to alter it to turn it into a redistribution scheme.

The inclination of cowardly Republicans would be to keep pushing the age of eligibility up. (Something that has big inherent problems, but something they know would probably be the least politically unpopular)

 

We can't 'control' inflation. But we could cause a lot less of it by printing less money.

...or, we could've a few decades ago. We're hooked on it now. The choices are hyperinflation or a crash (which really suck because one will cause the other anyway...)

 

Anyone who has tried to suggest reforming Social Security has been attacked pretty hard, and I don't see any change in that. So I think Social Security will be more likely to crash than be reformed. So since FICA is the sole funding mechanism for Social Security, that will require higher FICA taxes. Frankly, we would be better off gradually starting to raise them now rather than wait, but I don't see that happening.

 

Or grow yer own and get fat.

 

Whatever that means ¯\_(ツ)_/¯

 

Don't sweat the small stuff...

 

Even that will be a political quagmire because the Left will only want to raise it on the higher earners (yet not reduce the benefits for everyone else), so it will be an attempt to turn it into a redistribution scheme between different income levels, which it was really not so much originally intended to do.
We all know the Left often isn't very good at compromising, so it's doubtful the Left and conservatives will easily be able to agree on a compromise.

I predict the Left will try to ram something through and moderate conservatives will let them.
That seems to be the past pattern.
Probably something that hurts the middle class the most and doesn't hurt the wealthiest too much. (And this will be easy due to the nature of FICA already capping off above a certain income threshold)

 

Inflation is caused by increases in the wealth of the masses. When the incomes of average people rise, merchants raise their prices to capture the windfall. The high inflation of the late 70's was caused by women entering the work force. At the beginning of the decade very few women worked outside the home. By the end of the decade most women worked outside the home. With that extra income, families had greater purchasing power. Merchants raised their prices knowing full well there were families with money to spend. Reagonomics stalled inflation by causing the stagnation of wages. With wages growing at such a slow rate, merchants would lose customers if they raised their prices too fast. During the crash at the end of lil' Bush's disastrous presidency so many people lost their jobs that merchants began cutting their prices as the number of customers who could afford their products diminished. There was a very real fear of deflation occurring. During the last year of the Trump's presidency, because Republicans kept getting exposed to Covid-19 and unable to work, they gave the Democratic Party clear majorities from time to time. During these times the Democrats passed bills that greatly helped the American people, especially those lower on the income scale. Families have been getting a child tax credit every month. Low income families have been having massive boosts to their SNAP benefits. Unemployment benefits have been increased and expanded. There have been rent and other subsidies to get people through the pandemic. Then of course there have been the stimulus checks. As well as many under employed older individuals taking early retirement. The net result has been that lower income people have seen a rise in their income over the past year. Merchants have just been raising their prices to keep pace. In a year or two, as the pandemic dies down and the added benefits go away, inflation will slow considerably.

 

Women entering the workforce probably caused land prices and rents to rise.

Since housing is one of the biggest costs to people in many areas, I'm not sure if society is really that better off for that.

Now women are demanding "free childcare", as if they have the right to continue in their careers but not have to take care of their children.
(Hello? Maybe mothers could engage in a sharing agreement, combine forces and arrange for different mothers to take care of the children at different times?)

And we can't keep bringing in low wage immigrants to take care of the children, because eventually someone will have to take care of their children. So that would ultimately just be a pyramid scheme.

 

The interest rate has only a minimal effect on controlling inflation. Raising rates is an inflationary move as it causes one's costs to rise. Besides it was the floating interest rates that led directly to the near economic collapse at the end of lil' Bush's presidency. By the early eighties the upward pressure on the economy from so many women entering the workforce in the seventies had eased with the lower inflation rate following. The negative inflation rate at the end of lil' Bush's presidency was due to the crashing economy. Low inflation tends to occur when the economy is crashing, when wages are stagnant. High inflation occurs when the economy is booming and wages are rising. I don't know about anyone else, but I and mine have been doing quite well this past year. Inflation? Or is that economic prosperity at play? I think it is the latter.

 

I think it resolve itself when the supply issues resolve itself.

 

LOL Clearly