Posted on 06/13/2010 9:14:20 AM PDT by SeekAndFind
“People can complain, for example, about how college education costs have been rising faster than the rate of inflation for years . . . but those costs only affect those who are in college at any given time (which isn’t necessarily a large portion of our population). “
I don’t agree (maybe it’s different up there). People spend YEARS saving up for their kids’ college, often from before they’re born, so it does affect them - big time - maybe for 25 years, if they have several kids.
If college costs had only stayed the same relative to inflation, people would not have had to save up nearly as much and they could have enjoyed a higher standard of living.
Excluding food and energy.
May 19, 2010
On a seasonally adjusted basis, the CPI-U declined 0.1 percent in April after rising 0.1 percent in March. The index for all items less food and energy was unchanged in both March and April.
Wrong! Epic Fail.
Falling incomes represent the opposite of inflation: DEFLATION.
People who grew up during the inflation of the 1970's see every economic problem as being inflation...but like a stopped clock, that's generally not the case. Being right twice a day means being wrong a lot more times.
Salaries falling, stock prices falling, and home prices falling are giants in a room that has only a few little upticks in the price of every unemployed granny's milk and groceries.
Wrong. See post #43.
Everyone who is under-employed thinks that the prices they pay for their everyday survival are always going up.
That’s psychological, even though it’s human nature to claim “no, that’s my paycheck.”
But the price of milk going up is inconsequential compared to salaries falling, stock prices falling, and home prices falling.
We always have deflation. That's why movies are free when you wait for them to come out on broadcast TV.
If I wait 6 to 9 months after a popular movie comes out, I find that my library usually has it.
It's worse. It looks like we are in a liquidity trap ie., stagflation. Business and individuals are building large cash reserves and no job creation or growth is going on. Monetary policy is now powerless to get the economy going
From wikipedia:
The term liquidity trap is used in Keynesian economics to refer to a situation where the demand for money becomes infinitely elastic, i.e. where the demand curve is horizontal, so that further injections of money into the economy will not serve to further lower interest rates. Under the narrow version of Keynesian theory in which this arises, it is specified that monetary policy affects the economy only through its effect on interest rates. Therefore, if the economy enters a liquidity trap area—and further increases in the money stock will fail to further lower interest rates—monetary policy will be unable to stimulate the economy.
Well... there’s something to be said for “keeping everyone happy and ignorant” — so they’ll keep spending their money and boosting business... no matter what is coming down the pike ... :-)
If you have a job that pays well. ;)
The problem is business is gaining productivity by having people do more for the same or less pay. Also, without job creation each year more and more young people coming out of school are finding it tougher to get started. Japan lost a decade with this kind of economic malfeasance.
Well...you asked for it, lol.
We always have inflation---that's why most people PAY for tv (even paying EXTRA to get the broadcast channels) when it used to be free over the air :-)
That’s what we do. We get all our movies from the library. Don’t even use netflix anymore. (This is a deflationary behavior).
I’ve got several posts, “out there” on Free Republic, from the end of 2008 and forward, saying that we were (and are) going to be slinking into the Great Depression again, over the next couple of years. I was saying, back then at the end of 2008 and the beginning of 2009 that this would be “building” towards that Great Depression for the next several years. It still seems “on track” for doing that. The economy is sinking deeper into it. There are no signs of a legitimate turnaround.
I remember when it cost a dime to see a movie...
LOL. I remember getting a letter from DirecTV (I think) saying that I would have to pay an additional $5.00 a month to get the broadcast (NBC, ABC,CBS) channels.
I sent them a letter saying how relieved I was at their action and that I had been afraid that they'd eventually charge me to keep them off my TV. I thanked them.
We always have deflation. That’s why TV is free on youtube and the Internet.
I am not underemployed. My salary has remained constant for two years while the number of my expenses has declined even as the level of expense has steadily risen. Groceries is not an inconsequential category except maybe for those in the upper 20% or so.
You must be one of those who use the words inflation and deflation in all sorts of arbitrary ways as Keynesians do, to mean whatever they have in mind at the moment. Inflation is the increase in the money supply. Prices rise unevenly with wages and salaries rising last of all. Some prices even fall as others rise more, wages typically falling in the early parts of an inflation as business try to compensate for their increased costs and decreased market by cutting wages.
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