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

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

New York (CNN Business)No one likes paying more for stuff. That's why inflation, especially the sharp price increases we've seen in recent months, feels like a dirty word.

But on the whole, inflation can actually be a good thing for many working-class Americans — especially those with fixed-rate debt like a 30-year mortgage. That's because wages are going up, which not only empowers workers but also gives them more money to pay down debt. Plus, in the case of a mortgage, your monthly payment will be the same but your house will increase in value.

And many of the people taking a bath when prices rise are higher-net-worth people who hold the vast majority of government bonds.

The trouble is, you're not going to feel the upside immediately.

... https://www.cnn.com/2022/01/10/economy/inflation-good-bad-winners-losers-fixed-rate-debt/index.html​

Great points here, and the last sentence is perhaps the most important. While prices are creeping up and people are feeling the pinch, those of us with debts to pay off, such as a mortgage, should see benefits from increased wages and other income over time.

Have ye had your pay go up lately? I recently raised my rates (doing freelance work) to keep up, and that certainly is bound to help with debts in the long run. Suddenly I effectively owe less on my car now, for instance, and might be able to pay it off sooner.

 

Typical limousine liberal telling those struggling to support their families "this is good!" Hey, the quality of your life may be down, but at least the rich guy that didn't diversify his portfolio is not making as much!

 

I'm one of the little guys. It's not a Bentley or a limo that I'm working to pay off

 

When it costs $100 to fill your tank, the fact that you may have bought your car with 2017 dollars is cold comfort.

 

Yeah, that's the short-term pain. Of course, if you're paying that much to fill your tank, you're probably not driving the most practical vehicle in the first place.

 

Careful with open flames around that straw man.

 

So can you show how inflation was "good" for you?

 

So gas prices doubling and groceries off the scale in price is fine because your mortgage didn't change?
This is why inflation is a good thing?
I see economics isn't your strong suit.

 

those who have accruing assets will benefit from inflation, those that do not, will not, and, in ultimate terms, pay for those that do benefit.

 

What about the argument that people with debts will benefit from higher wages and other earnings?

 

Its not an argument since the higher wages are absorbed by increasing prices. The tax man gets a raise!

 

Nah. Prices will come down soon enough while pay will continue to be higher.

 

What do you mean by "soon enough"?

Can you give us a timeframe?

If inflation goes down, will that be a bad thing?

Because I'm told that inflation is a good thing.

 

By everyday American they're talking about the middle class. Meanwhile those of us that live paycheck to paycheck, don't own homes, and are seeing our rent increase. Our electric bill increase. Our car insurance increase. Our grocery bill increase. Our growing kids clothing prices increase. etc etc etc. And I'm making the same now that I was 2 years ago. And we know from past experience that the prices for most things will never drop again. Because they never do.

 

Prices fluctuate. Gas prices are always going up and down. Prices absolutely do come down, but we as humans have funny ways of remembering some things and forgetting others based on emotional attachment and other factors.

 

How do you figure?

 

The Dollar Store ain't the dollar store no more.

That ship has sailed.

Accept it.

 

He thinks Joe has a plan.

They never learn.

 

1: I said most prices will not come down. Obviously some will. But most will not.
2: I've lived in the same place for 11 years. I've yet to see my rent come down a single time.

 

The labor market has moved in favor of workers. Why aren't you demanding a raise?

 

The supply crunch will subside, for one thing. It's only a matter of time until that is sorted out. Fuel prices fluctuate and will likewise come down, especially as we move back into warmer weather, I expect.

 

Inflation tends 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. Neither inflation nor deflation is all good or all bad. That's a childish way of looking at economics.

 

Neither inflation nor deflation is all good or all bad. Inflation going down will be good in some ways . . . but will come at the price of interest rates going up, and job and wage growth likely going down.

 

I never saw anyone claim the first two things in your meme. As for the last two, inflation is always transitory, and it is good in some ways and bad in others.