Massive federal spending will not cause inflation. Change my mind.

83wuzme

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Apr 27, 2005
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We have a severe shortage of goods and, to a significant extent, services. We are being told that two multi trillion dollar federal economic aid / development programs are essential to rebuilding the economy. Much of this so called “ infrastructure “ spending plan involves cash transfers to individuals and service programs.
My question is : How will dumping trillions of dollars into an economy with a shortage of purchasing options do anything other than drive prices to much higher levels ? I’m willing to listen, but I want to see some math here.
 

LioninHouston

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Dec 12, 2005
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We have a severe shortage of goods and, to a significant extent, services. We are being told that two multi trillion dollar federal economic aid / development programs are essential to rebuilding the economy. Much of this so called “ infrastructure “ spending plan involves cash transfers to individuals and service programs.
My question is : How will dumping trillions of dollars into an economy with a shortage of purchasing options do anything other than drive prices to much higher levels ? I’m willing to listen, but I want to see some math here.
You are a f*%$ing bigot. I think that sums up the left’s argument.
 

m.knox

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We don't have a shortage of goods. They're all sitting right off the coasts of LA and NY

We have a shortage of people who want to work for a living

I beg to differ (in part). Many of the nation's manufacturers have back logs of several months to a year. I know companies that could work a year without taking a new order.

You may have seen NJ and other lefties celebrate retail sales numbers. In actuality, it's not a good sign. It means people are willing and able to pay more for goods they want... no matter the price.

I certainly agree with the second part.
 
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ao5884

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I beg to differ (in part). Many of the nation's manufacturers have back logs of several months to a year. I know companies that could work a year without taking a new order.

You may have seen NJ and other lefties celebrate retail sales numbers. In actuality, it's not a good sign. It means people are willing and able to pay more for goods they want... no matter the price.

I certainly agree with the second part.
The company i work for has a sizable back log. Three main reasons. 1. We cant find enough people to staff the facility sufficiently. 2. Raw materials are difficukr to aquire (most are imports). 3. Our equipment requires specialized techn8cians to perform PM and diagnostics because they are all outside of the US so our OEEs are awful.
 

m.knox

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The company i work for has a sizable back log. Three main reasons. 1. We cant find enough people to staff the facility sufficiently. 2. Raw materials are difficukr to aquire (most are imports). 3. Our equipment requires specialized techn8cians to perform PM and diagnostics because they are all outside of the US so our OEEs are awful.

Same here.
 
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HartfordLlion

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Depends on how it paid for. If it is truly pair for with taxes it may actually be dis-inflationary. Reason being that the private industry is better at putting money where it is needed and driving economic growth. Skimming that money off the private sector and having the government decide there to spend it is inefficient sometimes horribly inefficient. Obama's investment in solar companies was a perfect example of that, horrific payback for the money spent.

If the stimulus is paid for with deficit spending it will drive inflation as it is just injecting dollars into the economy no matter what it is target. OF course down the road it will be dis inflationary when it need to be paid back. Given how government estimates on revenue always seem to come up short there is a pretty good likelihood the stimulus will be inflationary as a significant portion will be paid with deficit spending and the sad thing is the Dems know this.
 
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LionDeNittany

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May 29, 2001
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We have a severe shortage of goods and, to a significant extent, services. We are being told that two multi trillion dollar federal economic aid / development programs are essential to rebuilding the economy. Much of this so called “ infrastructure “ spending plan involves cash transfers to individuals and service programs.
My question is : How will dumping trillions of dollars into an economy with a shortage of purchasing options do anything other than drive prices to much higher levels ? I’m willing to listen, but I want to see some math here.

In theory investment in infrastructure will lower prices of goods. Better roads, better ports, better airports.

However most of those things are worse due to government involvement and very little of this bill will go to making things better
 

Cosmos

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We don't have a shortage of goods. They're all sitting right off the coasts of LA and NY

We have a shortage of people who want to work for a living

I disagree. So long as goods aren't available on shelves there's a shortage. Moreover, those goods have a time value associated with them. The longer they sit the more costs companies incur. They'll have to recoup the costs, which means prices are going to increase. Perhaps that explains why retail sales revenue (dollars) have increased, as NJPSU deadpanned. I don't know for sure. But no way in hell retail sales units have increased. We know better because there are too many bare shelves.

We have a worker shortage but the million dollar question is this: how do people live when most states haven't extended UE benefits? I can't speak to California. Black market? Barter trade? Something is going on.
 
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NJPSU

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I disagree. So long as goods aren't available on shelves there's a shortage. Moreover, those goods have a time value associated with them. The longer they sit the more costs companies incur. They'll have to recoup the costs, which means prices are going to increase. Perhaps that explains why retail sales revenue (dollars) have increased, as NJPSU deadpanned. I don't know for sure. But no way in hell retail sales units have increased. We know better because there are too many bare shelves.

We have a worker shortage but the million dollar question is this: how do people live when most states haven't extended UE benefits? I can't speak to California. Black market? Barter trade? Something is going on.
Bitcoin
 

ao5884

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Oct 1, 2019
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I disagree. So long as goods aren't available on shelves there's a shortage. Moreover, those goods have a time value associated with them. The longer they sit the more costs companies incur. They'll have to recoup the costs, which means prices are going to increase. Perhaps that explains why retail sales revenue (dollars) have increased, as NJPSU deadpanned. I don't know for sure. But no way in hell retail sales units have increased. We know better because there are too many bare shelves.

We have a worker shortage but the million dollar question is this: how do people live when most states haven't extended UE benefits? I can't speak to California. Black market? Barter trade? Something is going on.
Eventually people will have no choice but to go back to work. For some reason an Idea has festered into a problem in the job market. That being no matter what job you have it should pay enough for you to live off of. However that is not nor has it ever been the case. It appears as that our young people will learn that lesson the hard way. My Oldest will be 14 next summer....he will have a job if he wants anything other than what i already provide for him. Im already hearing the "But Dad my friends dont have a job" nonsense. Sad thing was i did the same when my dad did the same to me...however i understand why he did so and how important it was now.
 

ao5884

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Oct 1, 2019
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Depends on how it paid for. If it is truly pair for with taxes it may actually be dis-inflationary. Reason being that the private industry is better at putting money where it is needed and driving economic growth. Skimming that money off the private sector and having the government decide there to spend it is inefficient sometimes horribly inefficient. Obama's investment in solar companies was a perfect example of that, horrific payback for the money spent.

If the stimulus is paid for with deficit spending it will drive inflation as it is just injecting dollars into the economy no matter what it is target. OF course down the road it will be dis inflationary when it need to be paid back. Given how government estimates on revenue always seem to come up short there is a pretty good likelihood the stimulus will be inflationary as a significant portion will be paid with deficit spending and the sad thing is the Dems know this.
Agree. Of course the ideal situation would be for private capital investment to increase creating a greater supply of goods and thus reducing prices. When government gets involved there is always a chance of an over supply of currency which of course will devalue said currency. The solution. Hard Assets, Gold and silver are dependable hedges against inflation
 
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PSUEngineer89

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Cost of a productive Unit = Total pieces of paper printed and distributed / Number of Productive Units produced and Distributed.

That's the math behind it. We measure it as "Real GDP", then divide by the total amount of $$ circulating and you have your answer.

If you think it through in terms of actual goods and services produced by an enclosed population center of about 1000 people, it all becomes very clear what MUST happen.
 

Cosmos

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May 29, 2001
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Eventually people will have no choice but to go back to work. For some reason an Idea has festered into a problem in the job market. That being no matter what job you have it should pay enough for you to live off of. However that is not nor has it ever been the case. It appears as that our young people will learn that lesson the hard way. My Oldest will be 14 next summer....he will have a job if he wants anything other than what i already provide for him. Im already hearing the "But Dad my friends dont have a job" nonsense. Sad thing was i did the same when my dad did the same to me...however i understand why he did so and how important it was now.

Good post. My dad, too. You'll do well to stand fast. Parenting is more challenging now than ever.

Here's another consideration. Management is under so much stress due to conflicting societal/employer/government demands that the workplace has become unbearable. I say this because I've family who are going through it right now. Vax mandates are just the proverbial 'straw that broke the camel's back'.
 

jrs1024

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Oct 10, 2005
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Eventually people will have no choice but to go back to work. For some reason an Idea has festered into a problem in the job market. That being no matter what job you have it should pay enough for you to live off of. However that is not nor has it ever been the case. It appears as that our young people will learn that lesson the hard way. My Oldest will be 14 next summer....he will have a job if he wants anything other than what i already provide for him. Im already hearing the "But Dad my friends dont have a job" nonsense. Sad thing was i did the same when my dad did the same to me...however i understand why he did so and how important it was now.
In hindsight, I had better relationships with people I worked with in high school than I did class mates. Working as a teenager is actually fun plus you get paid for it.
 

KnightWhoSaysNit

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Jul 19, 2010
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Hard Assets, Gold and silver are dependable hedges against inflation

Hard assets like land in the right place, yes. Gold and silver? I'm not so sure. Crypto has created competition.

I read an idea, I think it was on Marketplace, that suggested just loading up on nonperishable things you think you will need in the next 6 months. I thought about that and wondered why this wouldn't extend to a much longer period for things that tend to wear out or become spent, especially imported goods. (Ammunition?)

This was expected. The pandemic and the socialists just forced the transition much faster.

Currency devaluation -- lower standards of living -- will be required to not only build new infrastructure, but to bring manufacturing plants back to domestic soil.

In effect we need to reverse what happened during the last 4 decades, since the end of the previous inflationary super cycle.

Hardest hit will be new baby boomer seniors, too old to get a "pay raise," but too young not to run out of money.
 

HartfordLlion

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Sep 28, 2001
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Eventually people will have no choice but to go back to work. For some reason an Idea has festered into a problem in the job market. That being no matter what job you have it should pay enough for you to live off of. However that is not nor has it ever been the case. It appears as that our young people will learn that lesson the hard way. My Oldest will be 14 next summer....he will have a job if he wants anything other than what i already provide for him. Im already hearing the "But Dad my friends dont have a job" nonsense. Sad thing was i did the same when my dad did the same to me...however i understand why he did so and how important it was now.

I started out making my kids reffing soccer games. They were on a local town swim team and we made them get their life guard cert. They had jobs right up to college and they worked the life guard gig through college during the summer. They had close to 10K in the bank when they went to college which didn't get them all that far but at least they had some skin in the game. I also made them take out the guaranteed federal loans themselves. They all went to state schools so what they made during the summer, loans and what I told them we would contribute they made ends meet during college. All came out with less than $25K in student loans.
 

KnightWhoSaysNit

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Jul 19, 2010
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I started out making my kids reffing soccer games. They were on a local town swim team and we made them get their life guard cert. They had jobs right up to college and they worked the life guard gig through college during the summer. They had close to 10K in the bank when they went to college which didn't get them all that far but at least they had some skin in the game. I also made them take out the guaranteed federal loans themselves. They all went to state schools so what they made during the summer, loans and what I told them we would contribute they made ends meet during college. All came out with less than $25K in student loans.

I started working when I was about 12. By 14 I had a responsible position where I had to oversee kids much older. I worked summers through college.

Today I know parents that did not expect their kids to work. They made this excuse "Let them have their childhood." They funded a lot of their college by inheriting money from grandparents. These kids, now young adults, have no work ethic and start life with debt.

The ignorance started with the parents. The parents now say things like this to the kids for things like field trips: "You need to raise the money."

In other words, these parents taught their kids to be lazy, then expect them to beg others for money.

There is so much of this that inflation is the likely path to balance the loss of productivity. Our only hope is invention by the few that are not messed up.
 

ao5884

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Oct 1, 2019
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Hard assets like land in the right place, yes. Gold and silver? I'm not so sure. Crypto has created competition.

I read an idea, I think it was on Marketplace, that suggested just loading up on nonperishable things you think you will need in the next 6 months. I thought about that and wondered why this wouldn't extend to a much longer period for things that tend to wear out or become spent, especially imported goods. (Ammunition?)

This was expected. The pandemic and the socialists just forced the transition much faster.

Currency devaluation -- lower standards of living -- will be required to not only build new infrastructure, but to bring manufacturing plants back to domestic soil.

In effect we need to reverse what happened during the last 4 decades, since the end of the previous inflationary super cycle.

Hardest hit will be new baby boomer seniors, too old to get a "pay raise," but too young not to run out of money.
Gold and silver have always been hedges against inflation and have value that crypto cannot. Silver for example holds some value due to its applications in manufacturing (mainly electronics). They are also much more stable Than Crypto. And in tangible form immune from cybercrime...u cant hack into a gold eagle. But i agree that at least some crypto has very similar characteristics of gold and silver. Land is a different beast (but lucrative if u know what you are doing) It unlike gold and silver isnt dependent on location for part of its value An ounce of gold has a set price and acre of land can vary in price based on numerous other factors.
 

LMTLION

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Mar 20, 2008
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We don't have a shortage of goods. They're all sitting right off the coasts of LA and NY

We have a shortage of people who want to work for a living
Correction, it is only LA that has the real backlog per reports, but you are right we have a shortage of people in our lazy society.
 

ao5884

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Oct 1, 2019
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I started working when I was about 12. By 14 I had a responsible position where I had to oversee kids much older. I worked summers through college.

Today I know parents that did not expect their kids to work. They made this excuse "Let them have their childhood." They funded a lot of their college by inheriting money from grandparents. These kids, now young adults, have no work ethic and start life with debt.

The ignorance started with the parents. The parents now say things like this to the kids for things like field trips: "You need to raise the money."

In other words, these parents taught their kids to be lazy, then expect them to beg others for money.

There is so much of this that inflation is the likely path to balance the loss of productivity. Our only hope is invention by the few that are not messed up.
I was 14 officially although i worked summers doing farm work for cash previously. At 14 i became a tax payer and have been ever since. It wasn't that my parents didn't have the means to buy me things, they just wanted me to earn them. My dad always used to say "You will never understand what a dollar is until you understand what it takes to earn one" Of course then i brushed it off as old man nonsense and worked just to shut him up. Now i understand what he was telling me. Todays young people are different...i cant tell you how many interviews i do with new college graduates that have the mindset of being owed a certain salary or position because they have a degree. One of the first questions i ask is "are you willing to start at the bottom and work your way up through experience" The ones that say yes get a second interview the ones that say no do not.
 

ao5884

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Oct 1, 2019
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In hindsight, I had better relationships with people I worked with in high school than I did class mates. Working as a teenager is actually fun plus you get paid for it.
I talk to one of my HS classmates once in a blue moon....yet i am still in contact with my first supervisor on a regular basis. Never thought i would have that
 

junior1

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May 29, 2001
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I disagree. So long as goods aren't available on shelves there's a shortage. Moreover, those goods have a time value associated with them. The longer they sit the more costs companies incur. They'll have to recoup the costs, which means prices are going to increase. Perhaps that explains why retail sales revenue (dollars) have increased, as NJPSU deadpanned. I don't know for sure. But no way in hell retail sales units have increased. We know better because there are too many bare shelves.

We have a worker shortage but the million dollar question is this: how do people live when most states haven't extended UE benefits? I can't speak to California. Black market? Barter trade? Something is going on.
But isn't any such increase in prices "unfair and unjust"
 

KnightWhoSaysNit

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Jul 19, 2010
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Psaki should market herself to some communist countries. She's that good.

The reality -- based just on their admitted focus -- is that they don't have a clue. It's the most dysfunctional White House and Congress on record.

I don't see how the country survives until 2024. The Executive Branch is one big Affirmative Action experiment led by a man with literally no brain.
 

jjw165

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Jan 18, 2005
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Psaki should market herself to some communist countries. She's that good.

The reality -- based just on their admitted focus -- is that they don't have a clue. It's the most dysfunctional White House and Congress on record.

I don't see how the country survives until 2024. The Executive Branch is one big Affirmative Action experiment led by a man with literally no brain.
Oh, you called it.

c1afe856-f6d9-4f91-bc0f-a83f038ad625.jpg
 

HartfordLlion

Well-Known Member
Sep 28, 2001
20,149
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I started working when I was about 12. By 14 I had a responsible position where I had to oversee kids much older. I worked summers through college.

Today I know parents that did not expect their kids to work. They made this excuse "Let them have their childhood." They funded a lot of their college by inheriting money from grandparents. These kids, now young adults, have no work ethic and start life with debt.

The ignorance started with the parents. The parents now say things like this to the kids for things like field trips: "You need to raise the money."

In other words, these parents taught their kids to be lazy, then expect them to beg others for money.

There is so much of this that inflation is the likely path to balance the loss of productivity. Our only hope is invention by the few that are not messed up.

In other words, these parents taught their kids to be lazy, then expect them to beg others for money.

Unfortunately, you see lots of them today standing on street corner begging for money. Most are under 40. It has gotten totally out of hand in my area.
 

83wuzme

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Apr 27, 2005
13,279
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As far as the supply chain, I have learned that there are about 75,000 independent trucking operators in CA who have essentially been sidelined by a recent state law that requires them to be designated as employees. Why ? Maybe somebody can explain another one of these BS Progressive attempts at social engineering and central economic planning as to how having all of these idle trucking operators is helping anybody anywhere.