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Why do some people think inflation is not a problem?
Now more economists on the left are saying inflation is nothing to worry about, that recovery from Covid is more important. Anyone who was alive and old enough to work in the 70s remembers the inflation from that time period.
For anyone on a fixed income or at the bottom of the economic rung, inflation will be like an armed robber that will steal your standard of living away from you.
The economy is recovering, there are help wanted signs everywhere you go and everywhere you look.
raising the minimum wage to 15 an hour will do nothing if a loaf of bread costs 7 dollars and a gallon of milk is 8.50 and a pair of socks cost 11 dollars
People living on a set pension or social security who are barely paying their bills now will be out on the street completely, and with 20 million people ready to hit retirement over the next 10 years, many with very little savings, inflation will leave them homeless.
Now we are spending trillions of dollars as if its parade candy and no one bats an eye, after inflation spiraled out of control in the 70s the only way to stop it was to tighten the money supply and send interest rates soaring. I still remember when 12% interest was a good deal on a mortgage and 14 to 16% was standard on an auto loan.
Inflation is the worst thing to happen to an economy and we cannot pretend it doesn't matter just to pass some feel good legislation today, if we let inflation spiral again, the result will be far worse than what Covid did to us last year.
I hate to burst the bubble of "?". I was a young man working in the mid 70s and early 80s and witnessed who it hurt.
Also social security is less than half of most peoples retirement income, that other income is fixed. If the value of the dollar you saved is dropped by 25% because of inflation then your its like someone stealing 25%of your money. Also the index used to adjust social security does not include many things............. Yahoo's word limits prohibit proper discussion here.
"and some people are going to get hurt."
When lawmakers set policy and some people are going to get hurt, the income and benefits of those lawmakers, and the economists who advise them should be reduced by twice the level of those they decide to "hurt".
People who work hard and live by the rules these economists and lawmakers make should not pay for the damage those people do.
Adding to our debt the way we are is national financial suicide.
5 Answers
- ?Lv 73 weeks ago
I was also working during the 70s and 80s. The high interest rates were great for people like me who save. 15% interest on CDs, 10% on passbook savings, 5% on checking accounts. I lucked out and renewed CDs for 5 years just before rates started dropping, it was great times
- Girlie ElectricsLv 71 month ago
At this point in the game, it's a necessary evil.
That's what your stimulus payment is for; get the country spending, and increase the tax revenue ( from an increase in the volume of spending) to service the national debt, and get the economy moving again
- ?Lv 71 month ago
Inflation certainly is a problem, but you're wrong about "the bottom of the economic rung." Inflation reduces the real value of debt, so everyone who has fallen behind on their car/mortgage/loan/credit-card payments this past year would benefit from the rising salaries. Above them, anyone who is scraping by without debt but has no savings would barely notice inflation. Social security payments are adjusted for inflation, so anyone living on that alone would see no change. In fact, if prices of everything else rise as fast as medical care, it would improve the buying power of social security.
So who is hurt by inflation? People who have savings. That's the middle and upper classes. Except they're also the ones paying the majority of tax revenue. So while inflation is bad, the alternative way to reduce government debt, raising taxes, is also bad for the same people.
The government has generally tried to manipulate interest rates to keep inflation at 2-3%. The threat now is that because of the bad monetary policy over the past 10 years, they likely won't be able to keep inflation at this steady rate. When anything in the economy is unpredictable, security is going to cost more, and some people are going to get hurt.
- 1 month ago
Inflation almost destroyed the USA in the 1970s and early 80s, with our debt load today and economic competition from slave wage communist countries, we won't have the resiliency available to turn it around even with insane interest rates... We cannot keep throwing trillions of dollars around like its parade candy.
Is there anyone in DC who can look past the end of their own nose to recognize what they are doing to the future? Look what happened to every nation on earth that lost control of their economics and the value of their currency, it was total disaster.
Its not just the minimum wage, thats a small piece,, we pay interest on our national debt every year, that is money that could have been used every year for infrastructure, social programs and other needs. Before Covid we were spending almost 500 billion dollars a year on interest alone that did nothing to help anyone. That's like standing in front of a campfire and dumping billions of dollars on it just to watch the pretty flames.
Now we have added many trillions of dollars of additional debt with interest and we are setting ourselves on the path to force our interest rates to explode. This will drive our interest payments to trillions of dollars that are wasted every single year and that will do absolutely nothing to help anyone.
Meanwhile the brutal communist government in China which owns a lot of our debt will be spending all of our interest payments making themselves stronger and the democracies of the west weaker.
Inflation is something to worry about and its the biggest monster in the room, and our leaders are acting like its a cute little puppy.
