Prices didn't go back down.
this post was submitted on 03 Nov 2024
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News flash, most Americans were paycheck to paycheck before inflation, too.
"I've turned off the oven, yet food is still burnt"
If you really want to compare that to inflation slowing, then you haven't turned off the oven, you just slowed down the rate that you are making it hotter.
“Inflation” to economists is how much the price is going up this month.
“Inflation” to most people is how much stuff costs.
It feels like there needs to be some acknowledgement of that when this is all talked about, after the superinflation of 2022. The goal should be that prices go back down, not that they go back to going up by 3% per year now that they’re way up high.
The levers which incentives wages closing the gap on the "super inflation" are probably more realistic than the levers that would cause the prices of everything to deflate.
You really don't want deflation. The correct thing now is for wages to go up to match the new costs and this has been happening.
That's not really true though. The only way to maintain infinite inflation is with infinite growth. But we only have finite resources. We also have modern examples of countries that experience deflation and they aren't the horror shows that the finance industry wants about. For example, Japan.
The only way to maintain infinite inflation is with infinite growth
No - monetary policy also effects inflation. See also "stagflation".
We also have modern examples of countries that experience deflation and they aren’t the horror shows that the finance industry wants about. For example, Japan.
It doesn't have to be a "horror show" for it to be "bad". Japan's "lost decades" are hardly desirable.
Deflation would mean money is worth more. Great! But then prices drop. And then salaries drop. And now the ability for somebody to pay back a 30-yr. fixed mortgage gets harder over time rather than easier as it does in an inflationary environment.
So yeah - I'd rather a pay rise to match (or hopefully exceed) inflation that makes it easier for me to repay loans.
Edit: Oh - and frankly the thing that tends to lead to "disaster" is a rapid change in any direction. The entire goal of the "2%" inflation is "price stability". The US economy going into deflation would be catastrophic from our current trend.
You mean all those people who thought housing was an investment would get caught with a bad investment?
Oh shucks. Well, I better get back in line for the organ grinding machine then.
Both cycles have their downsides. Nobody is saying they don't. But having one without the other is unsustainable. You're afraid salaries will go down. Guess what? They went down anyways. They show a higher number, but every year they don't beat inflation is a year they went down. If wages drop during inflation and deflation, in real and gross terms, then I would venture to guess that inflation or deflation isn't the core problem there, but letting corporations rig the game so they always win over the workers. Also if 2% inflation is stabilization, why isn't 2% deflation? There's no magic thing about crossing the line that makes the economy crash.
You mean all those people who thought housing was an investment would get caught with a bad investment?
WTAF are you talking about? No - I'm talking about home ownership, purchasing a vehicle, starting a business, expanding a business, doing home repair / expansion, etc.
Do you just think "hey - one thing went wrong once so everything to do with that is broken"?
I won't continue this conversation - it's not worth it.
All of that still happens in countries with deflation.
to most people is how much stuff costs.
inflation to most people is an increase in the cost of stuff* FTFY
also to be clear, the goal is that wages rise to meet the increased inflation, that's the historical trend.
Yeah. Because wages have remained stagnant, or even decreased relative to prices. Inflation is supposed to be a response to people making more money, but that never happened. So now we're all just effectively poorer.
Inflation can happen for a bunch of reasons. It's just always cited in arguments against raising wages. The proper answer to which is, prices went up last year anyways, why can't prices go up a cent so I can have a dollar?
They'll keep waiting too. Because without some shock therapy like raising min wage to like $25 an hour overnight and taking that economic hit it's never going to get any better. This is the new normal until that happens.
You guys are getting pay checks?
"inflation has slowed, but prices are still high? Why is that?"
literally the title of this thread/article
Man i sure wonder why my rate of increase % lowering hasn't done much to change the value that it's cumulatively adding on top of....
"Many Americans" have always and will always live paycheck to paycheck. Seize the means of production.
The median sits around 80k these days. Everyone should be cheering, right?
What nobody wants to acknowledge is that the mode is still high 30's. Until that changes, we're leaving people behind.
I mean yeah, lower inflation doesn't mean prices go back down, and wages didn't inflate for most people.
CNBC can fuck all the way off with that brain dead journalism.
We were living paycheck to paycheck before that inflation boom too.
But it's also because inflation is a measurement of velocity, not a static indicator. If you have a year with ten percent inflation, that doesn't go away without deflation happening and the finance industry would rather nuke the stock exchange than allow deflation.
Inflation is still happening just slower. So things are still getting more expensive and wages are not following. It's not rocket science unless the guy funding your research specifically asks you to never recommend any solutions that don't make rich people richer.
They were doing that too begin with though?