Posted on 02/12/2021 6:58:40 AM PST by SeekAndFind
In the late 1970s, the U.S. experienced an economic condition known as stagflation. This meant the economy was not growing, yet prices were rapidly rising. One measure of just how bad things were was the Misery Index. This was found by adding the inflation rate to the unemployment rate.
Biden’s stated economic policies will significantly raise the Misery Index.
Most economists would probably say that a misery index of 7 or less is desirable. During the late 70s it hit nearly 20. That meant there were years when the inflation rate or the unemployment rate exceeded 10%.
Before the pandemic, the prior administration’s policies had the number down to 5.
The 1970s stagflation occurred because rising wages and commodity prices significantly increased the cost to produce goods and services. At the same time, the market could not respond to the resulting higher price by expanding output. That meant higher prices and no growth or stagflation.
The response that solved the problem was simply to create policies that enabled business to respond to market conditions by increasing their output. That would put downward pressure on prices, increase competition and increase growth. Significantly reduced tax rates for all income earners and corporations set the stage. Monetary policy was accommodating, resulting in low interest rates.
As a result of the tax cut, consumers had more money to spend. More importantly, business had the needed capital to invest, which mostly came from high-income earners and corporations. The unemployment rate fell as annual economic growth accelerated to 7.5% by 1984.
Stagflation and the resulting high misery index could return if Biden’s stated economic policies are fully enacted. The reason will be very simple: business will not be able to respond to market conditions by expanding output. Business will be forced to respond by raising prices.
(Excerpt) Read more at americanthinker.com ...
“IF”?...................They are implementing them at a fast and furious rate!........................
“...could return...”? Misery index is climbing quickly. And the lemmings seem just fine with it. 😕
Given the huge monetization of debt and the rapid increase (about 75%) in money supply in 2020, it can be expected that inflation will pick up in the coming quarters.
How will a left-wing government likely respond to this? The classic way is to impose price controls to shift the blame from the politicians and the central bankers who created the inflation to the “greedy businessmen” who are raising prices.
When inflation picks up, there will likely be a call for price controls, probably through executive decrees rather than legislation, at least at first. When there are price controls and prices are set below market levels, there will be shortages. BRACE YOURSELVES FOR THIS. It’s Jimmy Carter all over again. I hope Carter will still be alive to see his administration’s policies replayed in its full glory.
I think Americans are far too stupid to realize where the pain comes from.
yes....I can see amazon and all the biggies "forced" to raise prices....right up their alley and a great excuse.....
nobody but nobody cares about us, we the people....
stock up now on non perishables, stop buying dry goods thru retail..buy 2nd had whenever possible...
learn to trim your life so you're not "needing" so many items to live....
We just want our $2,000/mth each. “WHERE’S OUR DOUGH, JOE AND HO?!” 💰💰💰💰. 😄
Joe doesn’t care , well as long as no one turns off his Cartoons
Gas lines, whee!
It’s enough to make me think about a hybrid.
In the 70s my parents owned a store with gas pumps so we didn’t have to go through that.
Until the store shelves go empty.
https://www.federalreserve.gov/releases/g17/current/
https://ycharts.com/indicators/us_industrial_production_index_yoy
You can print all the stimulus checks you want, and it may even be really popular for some, but in the end money “is an abstract concept that represents human time.”
If production drops in manufacturing, and the service sector shrinks, even transportation and the production of some resources goes down - YOU END UP WITH A LOT OF MONEY/DEMAND CHASING A LIMITED SUPPLY = inflation.
Once reality kicks in and you have inflation and supply shortages, people won’t be so happy anymore. Especially when they want to buy a home or a car. But there’s a bit of a delay reaction. What is critical is that the supply disruptions are short lived. If the government keeps screwing with things because they want to play politics using a virus where nothing they did had any actual impact except the rapid development of a vaccine, they will cause some serious issues in the not so distant future economically for this nation.
Rigged election significantly raises the Misery Index indeed the democrats are turning people against it country by the day with it’s socialism propaganda lies and no plans other than power control.
Their party have never had any true leadership qualities only greed it’s why they have so much infighting.
But he has a 62 percent approval rating. Lol. I guess the people yearn for what’s coming.
“Biden’s Misery Index: Stagflation and the resulting high misery index could return if Biden’s stated economic policies are fully enacted”
Biden’s Misery Index: Stagflation and the resulting high misery index will return when Biden’s stated economic policies are fully enacted
There, fixed it
‘They’ don’t understand your argument, but if did, they wouldn.t care.
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