Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Far too many got used to getting public assistance and stimulus checks. When you look at wages at the lower end of the scale, compare them to what one can get from public assistance, and it starts to come together. Also, many cannot pass a drug test, so choose criminal activities for their "wages".
We MUST tighten public assistance and have STRONG work requirements.
Another issue is that with Bidenflation, prices are continuing to go up. And, some are hiring illegals (welcomed by the current Administration to enforce our laws), and those that cheat the system can pay less and get away with it. So we need more enforcement of our laws regarding immigration. Wages are also reduced in an area when illegals are being hired, and then we, the taxpayers pick up the tab for their "emergency medical to include child birth", and once they get an anchor baby, we are supporting the family with government housing. Maybe taxes were not so high supporting this, employees could be paid more!
This COVID stimulus argument is stupid.
For most folks, those stimulus checks amounted to a few thousand dollars years ago at a time when the government was basically forcing people into unemployment.
Attributing 2023 inflation rates to COVID stimulus checks from 2020 is absurd.
I retired from a career in banking and finance. I saw a lot of small business, both successful, and unsuccessful, through the years.
From my experience, the small businesses that were the most successful were those most willing to "share the wealth". By that I mean, they paid their vaulable and loyal employees good wages, enough for them to have a good quality of life, enough to help them support their families, have decent transportation, a modest home, some money going towards retirement, and maybe some medical benefits. When the small business did well, that success was shared financially with the employees.
These things are what keep workers engaged in a small business, caring about it's success, because they know that is tied to their own success.
Large corporations with their stupid and empty "pizza parties" and "Associate of the Month" parking spaces don't retain employees, because those things don't really have any real quality of life equivilance to the true value of their work.
Entry level used to pay a hard working man enough to buy a house and raise a family.
Why? Because what he did all day created THINGS that would earn enough PROFIT to allow that level of income*.
The SERVICE ECONOMY doesn't allow that. It doesn't work for a responsible adult employee ...or the employer.
*In 1903 Ford offered $5/day (x5d x 45wk) = at least $1125/yr
In 1903 a modest family home could be bought outright for that same amount.
From what I've read, the idea of only paying 20% down on a house and then financing the rest only came about during the Great Depression.
Which incidentally also greatly benefits the Federal Reserve and the current debt-based monetary system. How convenient
For most folks, those stimulus checks amounted to a few thousand dollars years ago at a time when the government was basically forcing people into unemployment.
Attributing 2023 inflation rates to COVID stimulus checks from 2020 is absurd.
The policies of 2020 are absolutely contributing to 2023 inflation. There is still excess savings as a result of those checks that is flowing into the economy. That is certainly part of the equation.
Which incidentally also greatly benefits the Federal Reserve
and the current debt-based monetary system. How convenient
Meh. Your thinking (context and timeline) needs some adjustment.
Don't confuse what BECOMES OF something nearly 100 years after inception
with anything that has anything to do with intent or how it was managed prior.
Liars and thieves abound and will find a way.
Entry level used to pay a hard working man enough to buy a house and raise a family.
Thought I'd come back with a few (almost actual) specifics.
Below is a current market RE listing for a house very nearby the examples I cited.
My 25yo Post Office Clerk GF & GM bought one like this BRAND NEW in 1910 for ~$1100
and her mother (my immigrant GGM) bought one (8 years old) in 1923 for ~$2100
Last month the comparo I selected randomly sold for $180,000
Note: This is considered an "investment" grade property. Other examples are priced higher.
And some can be had for way way way less too.
Both were bought with a token level down payment, easy to cover monthlies, and a 10year balloon.
(in essence, they are able to save for a house purchase while living there)
The houses were also sold under a GROUND RENT system --> LINK
The current owner is still paying the token annual amount ($35?)
Large corporations with their stupid and empty "pizza parties" and "Associate of the Month" parking spaces don't retain employees, because those things don't really have any real quality of life equivilance to the true value of their work.
Every large corporation I worked for had extensive profit sharing plans for EVERY employee down to the receptionist, employee stock options for all employees, restricted stock grants for all employees, employee stock purchase programs, cash bonus programs with payouts tied to corporate, division & individual performance, etc.
This way, every employee had a financial stake in the success of the company, and every employee participated when the company performed well.
Attributing 2023 inflation rates to COVID stimulus checks from 2020 is absurd.
If you think a bit more broadly, the response to COVID entailed ~$5 Trillion of new spending (including transfer payments) when you add up everything, mostly financed by creation of new money & new debt, which debt must be repaid.
To think that did not impact current inflation is, well, naive.
If you think a bit more broadly, the response to COVID entailed ~$5 Trillion of new spending (including transfer payments) when you add up everything, mostly financed by creation of new money & new debt, which debt must be repaid.
To think that did not impact current inflation is, well, naive.
I think it did influence it. However, the major cause of inflation has been supply chain issues.'
As these supply chain issues have eased, inflation has fallen dramatically from 9% a year to 3%. Supply chain issues were clearly the cause of most of it or it could not have eased as quickly as it. I think some tribute should be paid to how well a market economy functions. Business solved most of these issues on their own and did it pretty quickly.
The other issue is suppose payments made by government were the major cause of the inflation we experienced. What were the alternatives? Don't provide businesses with PPP and watch them fail in droves as they were forced to shut down. Don't provide employees with tax stimulus payments and unemployment compensation and watch as they lost their homes and apartments because they couldn't make the payments. A lot of tough choices were made by presidential administrations from two political parties between 2020 and 2022. I don't object to criticism of those decisions. I object to criticisms from those who seem to have totally forgotten the Covid 19 Crisis and those who only wish to blame one political party.
I think it did influence it. However, the major cause of inflation has been supply chain issues.'
While "supply chain" was a common trope among journalists, lit majors, and the other oeconomice illiterati, serious economists know otherwise.
Supply chain shocks can - and did - cause changes in relative prices of goods in short supply relative to goods that were not in short supply.
But a change in relative prices is not inflation.
Inflation is an increase in the overall price level of all goods and services, and everyone who passed a 1st year PhD sequence in mathematical macroeconomics (or even an upper division undergraduate sequence) knows supply chain shocks are irrelevant to the overall price level and do not cause inflation. All they do is change relative prices.
Quote:
Originally Posted by markg91359
As these supply chain issues have eased, inflation has fallen dramatically from 9% a year to 3%.
If supply chain constraints could cause inflation (and they cannot), clearing the bottlenecks would cause deflation. That has not happened.
Quote:
Originally Posted by markg91359
Supply chain issues were clearly the cause of most of it or it could not have eased as quickly as it.
Incorrect on both fronts.
Supply chain issues clearly were NOT the cause of inflation.
The cooling of inflation, just as has occurred throughout economic history, from the cooling of demand generated by a combination of monetary policy (primarily interest rates and regulatory tightening of the banking sector) and the fiscal shocks of transfer payments working their way through the system.
Quote:
Originally Posted by markg91359
The other issue is suppose payments made by government were the major cause of the inflation we experienced. What were the alternatives? Don't provide businesses with PPP and watch them fail in droves as they were forced to shut down. Don't provide employees with tax stimulus payments and unemployment compensation and watch as they lost their homes and apartments because they couldn't make the payments. A lot of tough choices were made by presidential administrations from two political parties between 2020 and 2022. I don't object to criticism of those decisions. I object to criticisms from those who seem to have totally forgotten the Covid 19 Crisis and those who only wish to blame one political party.
Hindsight is 20-20, or so they say, although it is clear that even hindsight isn't particularly clear to many in the popular press who have a political agenda to their reporting.
Knowing what they did when they did it, I can't fault the governmental actions during the early days of the pandemic.
What is generally accepted now is the initial epidemiological forecasts of deaths due to Covid were horribly wrong due to a combination of bad data, bad modeling, now-documented significant computer programming errors and errors of data science emanating from Imperial College London. The initial flawed estimates of death were fed into good models of economic consequences coming out of the University of Chicago and comparing those the Value of a Statistical Life as estimated by our government and published in peer-reviewed academic journals (open models & data), and out came the recommendation to shutter the economy. But, as the saying goes, we now know that to be a case of garbage-in/garbage-out (GIGO)
At some point during the first year or so of the shutdown, everyone -including our government - agreed that GIGO had occurred. Our government erred by not correcting course quickly enough.
But all of that is irrelevant to the discussion of the causes and cures of inflation.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
