"Look at prices and income throughout the last 60-70 years. You think wages have gone up a lot more than prices?"
Yes, they have, although over the last 30 years this has been stagnated due to Neoliberal policies. In 1955 median household income in the US was only $5,000, adjusted for inflation, that's about $25k today. But median household income today is about $40k, so yes, people are richer.
"That's exactly what you're talking about."
No it's not at all what I said. You are making it sound like I want 30-50% inflation annually, I want 4-5%.
"I'm not talking about a number. "The inflation rate is this or that". I'm talking about the real impact of real inflation. I don't care about some number they pulled out of their asses to stamp on the problem."
This is economics, you can't talk about it accurately without talking about numbers. Don't like the way the CPI is calculated? Fine, calculate it yourself and come back to me, but don't just stand there and scream inflation is so high if you don't have any numbers. MIT has a project called the billion price project that uses online retailers to calculate inflation. It's totally separate from the government but actually ends up showing pretty much the same picture as core CPI.
"I was saying that wages have only gone up to keep up with rising prices to the devalued dollar"
Yeah, but you're wrong. Like I've said a few times now, wages have risen faster than inflation over the long run. If you bothered to actually look at numbers and stop trying to argue with feelings you'd see that.
"The standard of living is most certainly not higher now."
Flatly false.
"we have a bunch of cool shit, but it's all bought through credit cards. Everything is backed by debt. "
Right, which is why we need measures to raise the standard of living of the poor and middle class, one of them being a large fiscal stimulus.
"The wage only goes up because it has to."
No, in principle wages are supposed to go up if productivity goes up, but the massive union busting along with other policies designed to move money to the top of the economic scale that the US has implemented over the last 30 years have divorced wage growth from productivity growth.
"You're god damn right it is. If we hadn't been printing money all these years, the purchasing power of the USD"
This is an INdirect relationship, not a direct one. MV=PQ bro, all you're talking about is M and P, that's only half of the equation.
"I mean seriously? The price of everything has gone up by that much simply because the supply has gone down massively and the demand has gone up?"
Like I've already explained, the prices haven't gone up all that much. Demand is always going up in the long run since there are always going to be more people, and supply sometimes has drastic shocks in things like food and energy, that's why those are the most volatile prices. Core CPI has been pretty much stable.
"I wasn't saying that. If the money you have is worth less, it takes more to buy a product. If the money a store takes in is worth less, and they don't raise the prices, they will cut the amount of money they make."
You're argument is circular. The higher prices ARE the inflation, so how can the business owners be reacting to something that they are effecting? The fed could print a quadrillion dollars tomorrow, if it doesn't get spent it's not going to change prices at all. Again, MV=PQ
"You're basically saying that the fed didn't print enough money and that's why we had the great depression? Not even touching that. Also, you just argued that the money supply isn't even a large part of what causes inflation. This post seems to say the opposite."
Yes, go read what Milton Friedman (that damned dirty socialist) wrote about the great depression, and how tight monetary policy and adherence to the gold standard was the main cause. I'm not arguing that the money supply isn't a driver of inflation. Over the long term, it is the main driver, but over the short term, it's often other things that influence it. I'm just going to start writing MV=PQ over and over I guess. P is the inflation, M is what the fed can control. The fed can't control V or Q.
"BUT INFLATION IS BEING SEEN IN ALMOST EVERYTHING. Look at what you could buy with a single USD 60 years ago, and what that same USD get's you now. "
Do you want to talk about a 60 year time span or do you want to talk about relevant time spans? Yes, if someone hid their money in a mattress 60 years ago and then went back to it now and wanted to use it, they will take a significant loss. I don't know anyone who is that bad with their money though. If someone put that money in treasury bonds 60 years ago and wanted to use it now, they'd be doing pretty well.
"Well that's a load of bullshit."
Sorry, I should have said inflation is only a a problem is wages or stagnant or it becomes so sever that people lose faith in money, but that takes inflation rates well into the double digits. I'M TALKING ABOUT 5%.
"If our economy wasn't total shit, people might be able to get some jobs, and get some money."
Again, you're speaking in circulars. If people had jobs and money, the economy wouldn't be total shit. We need to create the jobs.
"The federal government doesn't have money. this is the whole problem. It's not like the federal government is just made of money."
Actually it literally is. The US is a sovereign currency issuer, it can no more run out of money than a referee can run out of points to put on the score board. Default is impossible, the limitation is inflation, WHICH HAS BEEN WAY UNDER TARGET.
"You can't jump start an economy by printing out money."
Sure you can. People need jobs, people work for money, this is not actually that complicated. We did it for WWII and it got us out of the depression, and we've been doing it in smaller scale in every recession since, and it works. The only reason we are in trouble now is that we have all apparently forgotten economic history and are running around like chickens with our heads cut off.
"Interests rates are artificially low thanks to the fed."
Then explain why they didn't go up after QE2.
"Be specific. Some countries in europe are a joke, some are doing things very very well. "
The ones that borrow in their own currencies and have the most public spending are doing the best. Just look at Spain vs Sweden.
"The fed will keep the rates low. It's not like we have a free market economy to determine the rates. "
Then why are you so worried about them going up?
"I do have a grasp on the economy though."
No you don't.
"There's a reason the people didn't see the recession coming. They follow the same ideas that you follow."
Dean Baker and Paul Krugman are the two economists I read the most and they both called the recession before it got here. Dean Baker called the housing bubble in 2002.
"Peter schiff was on there talking about the collapse of the financials that was coming."
Peter Schiff has been wrong about more of his predictions than he's been right about and his firm's performance is in the tank.
"When people were talking about fannie may and freddie mac going back to 2003. That it was a huge issue coming up. "Oh no, everythings cool. Rabble rabble" then all the sudden a shit storm appeared some years later."
Fannie and Freddie were followers into the sup-prime market because other firms were gaining market share and they were losing out. They didn't lead the market, and they were private for profit entities.
"I'm not a brilliant economist"
You're not an economist at all actually, and neither am I, but I'm at least smart enough to find the people that have the facts to back up what they're saying.
"If you think the federal reserve system has helped America, you're a fucking idiot"
I have lots of problems with the fed. It's run by and for the private banks and I think it should be nationalized.
