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What are Biden, Booker and the other 2020 presidential candidates proposing to do about INFLATION?

 
 
oralloy
 
  0  
Reply Tue 23 Jul, 2019 09:28 am
JGoldman10 wrote:
What are Biden and Booker and the other candidates proposing to do about inflation, if any of them get elected?

Probably nothing. It isn't really anything that a president has any control over.


JGoldman10 wrote:
Something NEEDS to be done about inflation. It needs to be reduced or eradicated entirely.

Why? The Fed keeps it at about 2%.

What would be the advantages of a inflation rate lower than 2%?
chai2
 
  2  
Reply Tue 23 Jul, 2019 10:03 am
@JGoldman10,
JGoldman10 wrote:

If you must know I grocery shop for 3 people, myself included.


Well yeah, I think that would have been a pretty baseline bit of info to give.

So you're complaining about spending $100 on 3 people?

Would you be complaining if you shopped just for yourself and spent $35, a third of $100?

Mostly though, you're purposefully ignoring the fact that wages were different then.
You would have been complaining back in 1982 if you spent $38, which was the value of $100 today.

Do you truly not understand that?

livinglava
 
  1  
Reply Tue 23 Jul, 2019 01:36 pm
@oralloy,
oralloy wrote:

Probably nothing. It isn't really anything that a president has any control over.

Don't be silly. Lots of things influence the inflation/deflation rate, and wages are one of them. Dems/Unions tend to push for higher wages, which of course cause inflationary pressure insofar as workers continue to produce/distribute the same amount of goods/services, but now they are getting paid more for them.

Quote:

Why? The Fed keeps it at about 2%.

The Fed doesn't actually control it. They just raise or cut interest rates, which has the effect of stimulating investment and/or saving. If investment is stimulated, that stimulates inflation; while anti-inflationary/deflationary pressure happens when more money is saved instead of invested.

The problem is blocks against price competition in many markets, where prices would otherwise go down in a more competitive economy where more people are saving due to better returns on saving.

Quote:
What would be the advantages of a inflation rate lower than 2%?

You wouldn't have to risk money by lending/investing it for it to be worth more in the future.

livinglava
 
  1  
Reply Tue 23 Jul, 2019 01:42 pm
@chai2,
chai2 wrote:

Mostly though, you're purposefully ignoring the fact that wages were different then.
You would have been complaining back in 1982 if you spent $38, which was the value of $100 today.

Do you truly not understand that?

You see what's funny about you saying this? People want wage raises, so politicians/unions push for them. Then inflation happens and it negates the raises. People's savings get devalued in the process, so it basically amounts to taxing people's saving and keeping wages constant.

Why is that acceptable?
0 Replies
 
oralloy
 
  0  
Reply Tue 23 Jul, 2019 02:18 pm
@livinglava,
livinglava wrote:
Don't be silly. Lots of things influence the inflation/deflation rate, and wages are one of them. Dems/Unions tend to push for higher wages, which of course cause inflationary pressure insofar as workers continue to produce/distribute the same amount of goods/services, but now they are getting paid more for them.

In a world without the Fed, maybe. But the Fed will act to counter these factors and keep the rate as close to 2% as they can.


livinglava wrote:
The Fed doesn't actually control it. They just raise or cut interest rates, which has the effect of stimulating investment and/or saving. If investment is stimulated, that stimulates inflation; while anti-inflationary/deflationary pressure happens when more money is saved instead of invested.

That has the effect of controlling the rate.


livinglava wrote:
The problem is blocks against price competition in many markets, where prices would otherwise go down in a more competitive economy where more people are saving due to better returns on saving.

I'm not aware of any problem. What blocks against price competition?
Jewels Vern
 
  1  
Reply Wed 24 Jul, 2019 12:47 am
@izzythepush,
That is not a healthy economy, that is merely the effect of restoring honest money. Printing phony money creates high employment, restoring honesty creates low employment until the phony money is worked out of the system. It is the money that is unhealthy, not the economy.

There is a reason why this is not taught in public schools.

BTW, Kennedy was the last president to try to restore honesty to the system. You know what happened to him.
izzythepush
 
  1  
Reply Wed 24 Jul, 2019 05:32 am
@Jewels Vern,
You don't know what you're talking about. Economics is taught in schools over here.

And I'm sure you can take a degree in it in America.

This isn't the only subject where you've shown profound ignorance, and I've got better things to do than explain the flaming obvious to you.

This website is called Able2Know, I think you'd be better off at FuckedifIknow.com
Jewels Vern
 
  3  
Reply Wed 24 Jul, 2019 09:01 am
@izzythepush,
You're such a sweetheart. But you have lousy manners. Work on that, ok?
izzythepush
 
  2  
Reply Wed 24 Jul, 2019 09:45 am
@Jewels Vern,
And you're an irritating ignoramus.

I'd rather be honest that hide behind false smiles. The difference is I can put on the charm when I want to but there's nothing that can be done about your ignorance.

RABEL222
 
  1  
Reply Wed 24 Jul, 2019 12:39 pm
@izzythepush,
Ignorance? That's when someone disagrees with what my version of what something should be.
oralloy
 
  1  
Reply Wed 24 Jul, 2019 12:46 pm
@Jewels Vern,
Jewels Vern wrote:
That is not a healthy economy, that is merely the effect of restoring honest money. Printing phony money creates high employment, restoring honesty creates low employment until the phony money is worked out of the system. It is the money that is unhealthy, not the economy.

So long as the inflation is no higher than 2%, how is it unhealthy?
izzythepush
 
  -1  
Reply Wed 24 Jul, 2019 12:53 pm
@RABEL222,
No it's not. You're quite open about what you don't know, you don't affect a smug scholarly veneer of bullshit.

That's what gets on my tits.
0 Replies
 
livinglava
 
  1  
Reply Wed 24 Jul, 2019 01:16 pm
@oralloy,
oralloy wrote:

In a world without the Fed, maybe. But the Fed will act to counter these factors and keep the rate as close to 2% as they can.

How, by raising interests rates and putting the brakes on growth?

That doesn't mean politicians can't or shouldn't take responsibility for policy influence on inflation. It would be better, for example, to maintain or reduce minimum wage and wages generally than to raise them and provoke the Fed to raise interest rates in response.

When you have to raise interest rates to keep up with inflation, that creates a situation where banks have to lend out money to make interest on it, which stimulates inflation in and of itself.

Basically, politicians that support inflationary growth/stimulus block the evolution of more natural forms of fiscal conservation that prevent, counteract, and even reverse inflation. As long as people/businesses are borrowing and spending, they devote less attention to fiscal conservation and structural reforms that makes it possible to do more with less spending/investment and thus save more money.

Quote:

I'm not aware of any problem. What blocks against price competition?

Practically everything business does is in an effort to avert price competition. There are a few products and services that can't escape price competition, but there are many others that can and do even though the fundamental principle of free market economics, i.e. low barriers to market entry, is supposed to be maintained and honored in order to allow new competitors to emerge.

Nash's game theory explains a lot that Adam Smith's can't. Firms pay attention to each other and settle into cartels behind a price leader. Even if they don't actively collude, they avoid price competition knowing that they all lose revenues when prices start going down due to competition. They focus on product differentiation and niche marketing instead, because that way the price-leader will keep its prices high enough to protect the rest from looking too expensive and thus losing business.

oralloy
 
  1  
Reply Wed 24 Jul, 2019 02:28 pm
@livinglava,
livinglava wrote:
How, by raising interests rates and putting the brakes on growth?

If inflation is above 2%, yes.

If inflation is below 2%, interest rates will be lowered in order to increase growth.


livinglava wrote:
That doesn't mean politicians can't or shouldn't take responsibility for policy influence on inflation. It would be better, for example, to maintain or reduce minimum wage and wages generally than to raise them and provoke the Fed to raise interest rates in response.

Why would it be better? The Fed will hold inflation at 2% regardless.


livinglava wrote:
When you have to raise interest rates to keep up with inflation, that creates a situation where banks have to lend out money to make interest on it, which stimulates inflation in and of itself.

Raising interest rates results in the banks lending out less money, which cools the economy and reduces inflation.


livinglava wrote:
Basically, politicians that support inflationary growth/stimulus block the evolution of more natural forms of fiscal conservation that prevent, counteract, and even reverse inflation.

That's OK. The Fed will ensure that inflation does not deviate from 2% no matter what the politicians do.

Note that we don't want to prevent, counteract, or (God forbid) reverse inflation. We want inflation to stay at 2%.


livinglava wrote:
As long as people/businesses are borrowing and spending, they devote less attention to fiscal conservation and structural reforms that makes it possible to do more with less spending/investment and thus save more money.

That is an unavoidable side effect of having a strong economy. People will only strive to make do with a little if they are facing dire shortages.


livinglava wrote:
Practically everything business does is in an effort to avert price competition. There are a few products and services that can't escape price competition, but there are many others that can and do even though the fundamental principle of free market economics, i.e. low barriers to market entry, is supposed to be maintained and honored in order to allow new competitors to emerge.

Nash's game theory explains a lot that Adam Smith's can't. Firms pay attention to each other and settle into cartels behind a price leader. Even if they don't actively collude, they avoid price competition knowing that they all lose revenues when prices start going down due to competition. They focus on product differentiation and niche marketing instead, because that way the price-leader will keep its prices high enough to protect the rest from looking too expensive and thus losing business.

So how should things be changed in order to increase market competition?
livinglava
 
  1  
Reply Thu 25 Jul, 2019 07:59 am
@oralloy,
oralloy wrote:

livinglava wrote:
How, by raising interests rates and putting the brakes on growth?

If inflation is above 2%, yes.

If inflation is below 2%, interest rates will be lowered in order to increase growth.

Why not lower the inflation target and see how the economy responds? If stable, low-level deflation could be achieved, it could do a lot of good. If nothing else, it would stimulate government to explore different ways of ensuring social-economic security when problems arise from decreased investment; i.e. self-governance/self-limitation of economic activity when opportunities are available by reason of other ethics besides the ethic to make more money by utilizing more resources.


Quote:

Why would it be better? The Fed will hold inflation at 2% regardless.

Inflation is bad for people who save money. Deflation would be good for them. Why should the economy always be slanted in favor of people who borrow, spend, and waste money instead of saving? Why not favor those who conserve fiscally for a change?


Quote:
livinglava wrote:
When you have to raise interest rates to keep up with inflation, that creates a situation where banks have to lend out money to make interest on it, which stimulates inflation in and of itself.

Raising interest rates results in the banks lending out less money, which cools the economy and reduces inflation.

Right, but if inflation would be stopped/reversed by other policies and by voluntary behavioral changes in markets, less money could be borrowed without banks having to raise interest rates.


Quote:
livinglava wrote:
Basically, politicians that support inflationary growth/stimulus block the evolution of more natural forms of fiscal conservation that prevent, counteract, and even reverse inflation.

That's OK. The Fed will ensure that inflation does not deviate from 2% no matter what the politicians do.

Both politicians and everyone else should adopt more fiscally responsible behaviors to strive for a more conservative economy. It would not only be good for saved money, but also for resource conservation.

If the Fed gets to 0% interest and borrowing would still be decreasing, that would indicate tremendous economic health, would it not?

Quote:
Note that we don't want to prevent, counteract, or (God forbid) reverse inflation. We want inflation to stay at 2%.

We should. Inflation is a sub-optimal economic paradigm that we have tolerated for decades because we're afraid of recessions. If we would find ways of preventing/solving the problems that come with recession, it would be healthier to end inflation and to eventually achieve a stable, low deflation rate.


Quote:

That is an unavoidable side effect of having a strong economy. People will only strive to make do with a little if they are facing dire shortages.

That is an economic weakness. Progress in waste-reduction should occur as part of a healthy economy. We achieve a better and more sustainable future if we constantly innovate in ways that return more land to a natural/reforesting state, reduce resource use so that more resources are available farther into the future, and overall more breathing room is created for population growth by achieving comfortable standards of living that require less resources per capita. This is the job of economies, not just having growth so people can invest, make, and spend more money without regard for the effects their economic activities are causing on each other, the environment, and future generations.


Quote:

So how should things be changed in order to increase market competition?

Make laws that allow lawsuits against anti-competitive market behaviors.

Businesses will of course try to buy their way out of such lawsuits, either by paying off plaintiffs, lobbying government to create loopholes, etc.

In fact, businesses even know how to create situations in which potential competitors will come to work for them instead of entering their market to put competitive pressure on them to lower prices.

So enabling lawsuits is really not enough. You actually also need to identify areas/opportunities for stimulating competition within specific market areas and find ways to effectuate market entry.

Currently, I believe there is a lawsuit going on against pharmaceutical companies that colluded to avoid price-competition in drug production/distribution and I think there is also a bill to require drug companies to price drugs within a range based on an index of a number of other countries.

Each situation and market is different. Generally, the solution is to watch markets critically to see where competition could emerge but doesn't. Business and investors of course don't want to be stifled in doing whatever they can to increase revenues/profits as high as possible, but a free market isn't really a free market unless price-competition is fully actuated.

Of course, there is a reasonable counter-argument against full actuation of price-competition, which is the potential for waste that comes when prices to consumers and/or businesses are low. From the perspective of controlling waste, it actually makes sense to allow prices to rise until quantity-demanded is cut down to acceptable levels.

Ideally, however, waste-reduction/conservation can occur within a free market paradigm if people/business take the liberty of only using what they need and avoiding waste voluntarily. That is extremely difficult for people who see opportunity to produce/acquire/sell more when prices are low, but that is the big challenge of liberty in a free and prosperous society/economy.
0 Replies
 
JGoldman10
 
  0  
Reply Thu 25 Jul, 2019 05:23 pm
Pardon my ignorance, but did the Great Depression come about because of inflation?
glitterbag
 
  2  
Reply Fri 26 Jul, 2019 12:02 am
@JGoldman10,
ahhhhhhhhhhhhhhgggggggggggg. Heaves big sigh, No.....the Great Depression did not come about because of inflation.
0 Replies
 
livinglava
 
  1  
Reply Fri 26 Jul, 2019 11:23 am
@JGoldman10,
JGoldman10 wrote:

Pardon my ignorance, but did the Great Depression come about because of inflation?

There was hyperinflation of the German Mark during the first world war. You should review the global events going on during that time and see if you think there was a connection with the stock market boom that happened during the 1920s before the big black Thursday crash that began the Great Depression.
https://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_Republic
0 Replies
 
Jewels Vern
 
  0  
Reply Fri 26 Jul, 2019 02:52 pm
@oralloy,
Quote:
So long as the inflation is no higher than 2%, how is it unhealthy?


"Healthy" is a poorly defined word. 2% inflation means someone is stealing 2% of all the money in the country every year. Now you explain to me whether you consider that amount of theft to be healthy or unhealthy. (Of course it might depend a lot on whether you get a share of the loot!) I invested in silver when it was five bux an ounce and swapped to gold as the prices changed, so I have done very well because of rampant inflation. But I don't consider my success as "healthy economy".
0 Replies
 
 

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