Obama's budget is a nervous breakdown on paper

[ilia25]

Right here.

In case you are wondering what you are looking at, the red line is the average of the S&P divided by the cost of a gallon of gas, the blue line is tracking the price of a gallon of gas. Prices of commodities are going up, and the return on investments is going down. That, despite all the numbers that indicate otherwise, is inflation.

There are always things that get more expensive, while others get cheaper. What matters is the overall inflation.

If Keynes was actually correct then the only thing keeping us put of inflation is the fact that we are in a recession.

Bingo!

 

[ilia25]

Ain't that the truth. We have had this problem for decades, and we will always have people like ilia around to say we can wait a bit longer. I won't support anyone who is not willing to stand up and say we need to deal with this now, and that does not include Obama.

Except "dealing with it now" will turn US into Greece. Which is what happens to any country that is forced to "deal with it now".

 

[FA_Q2]

What inflation are you talking about, you silly thing?

Right here.

In case you are wondering what you are looking at, the red line is the average of the S&P divided by the cost of a gallon of gas, the blue line is tracking the price of a gallon of gas. Prices of commodities are going up, and the return on investments is going down. That, despite all the numbers that indicate otherwise, is inflation.

There are always things that get more expensive, while others get cheaper. What matters is the overall inflation.

Actually, overall inflation does not matter at all. What matters is the type inflation that is occurring - necessities like food and gas are inflating. Those are the important things. I could care less if the price of electronics or furniture goes up. Does not matter in the least. When food and gas increase in price though, it has a real and immediate impact on people's lives - particularly poor people. You can couple this with the fact that homes decreased in vale and we have a real problem. IOW, peoples wealth (their homes) decreased and their cost of living (food and gas) increased. Charts in this respect are rather meaningless. I pay double for a gallon of milk than what I paid 5 years ago. THAT speaks for itself, no matter how many times the government may want to point out a flat inflation. Those of us that eat know a different story.

 

[FA_Q2]

Ain't that the truth. We have had this problem for decades, and we will always have people like ilia around to say we can wait a bit longer. I won't support anyone who is not willing to stand up and say we need to deal with this now, and that does not include Obama.

Except "dealing with it now" will turn US into Greece. Which is what happens to any country that is forced to "deal with it now".

No, it won't. That type of fear mongering is pointless. The deficit does not need to vanish tomorrow. What needs to happen is that we take serious steps in addressing it. What we have taken is steps in the exact opposite direction. Then we make asinine, overly positive 'projections' that are outright lies just to cover up some of the asinine numbers. Keep in mind, even with the rosy projections, we STILL maintain large deficits over the next decade. Exactly when are we going to address the problem when 10 years shows no real progress?

 

[Quantum Windbag]

There are always things that get more expensive, while others get cheaper. What matters is the overall inflation.

If Keynes was actually correct then the only thing keeping us put of inflation is the fact that we are in a recession.

Bingo!

Then you agree that applying Keynes to this is a mistake?

 

[ilia25]

If Keynes was actually correct then the only thing keeping us put of inflation is the fact that we are in a recession.

Bingo!

Then you agree that applying Keynes to this is a mistake?

Why? This is what I said before -- the inflation cannot take off until the recession is over.

 

[ilia25]

Ain't that the truth. We have had this problem for decades, and we will always have people like ilia around to say we can wait a bit longer. I won't support anyone who is not willing to stand up and say we need to deal with this now, and that does not include Obama.

Except "dealing with it now" will turn US into Greece. Which is what happens to any country that is forced to "deal with it now".

No, it won't. That type of fear mongering is pointless. The deficit does not need to vanish tomorrow. What needs to happen is that we take serious steps in addressing it.

The easiest way to take steps is let the Bush tax cuts expire:

 

[Quantum Windbag]

Bingo!

Then you agree that applying Keynes to this is a mistake?

Why? This is what I said before -- the inflation cannot take off until the recession is over.

Inflation is already happening, as I pointed out when you asked, which makes Keynes wrong, or proves we are not in a recession. The reason your pretty chart doesn't indicate inflation yet is that it strips out food and energy prices from its inflation calculations. They think that core inflation is abetter indicator of price trends, bit they also thought the housing bubble wasn't going to collapse. I have to admit they have a lot of evidence to back them up, but I don't think they can rely on oil spikes not causing inflation.

By the way, Hoenig is also worried about inflation right now, as are other members of the board, so don't try to argue that no major economists are concerned about inflation. That issue is responsible for the first public split in the Federal Reserve Board in memory.

 

[Quantum Windbag]

Except "dealing with it now" will turn US into Greece. Which is what happens to any country that is forced to "deal with it now".

No, it won't. That type of fear mongering is pointless. The deficit does not need to vanish tomorrow. What needs to happen is that we take serious steps in addressing it.

The easiest way to take steps is let the Bush tax cuts expire:

Raising taxes on everyone across the board is not going to happen anytime soon.

By the way, the easiest way to deal with it is to follow the recommendations of Simpson-Bowles.

 

[ilia25]

Then you agree that applying Keynes to this is a mistake?

Why? This is what I said before -- the inflation cannot take off until the recession is over.

Inflation is already happening, as I pointed out when you asked, which makes Keynes wrong, or proves we are not in a recession.

No, it isn't. We don have a rise in inflation.

The reason your pretty chart doesn't indicate inflation yet is that it strips out food and energy prices from its inflation calculations.

No, it doesn't.

Here is how it looks with the food and energy stripped (the red line):

By the way, Hoenig is also worried about inflation right now, as are other members of the board, so don't try to argue that no major economists are concerned about inflation.

I am not -- there are many major economists that give a bad name to the profession. Some of them are on the payroll.

 

[ilia25]

I pay double for a gallon of milk than what I paid 5 years ago.

I feel your pain, but there nothing we can do about it. The economies in Asia and even Africa are growing faster than those in the developed countries. That means the commodities are getting more expensive relative to the American salaries.

Even if we could make the dollar milk price stable, it would mean cuts in your pay check -- and that is the ideal case. In reality such a policy would cause a recession, because a lot of people have to lose their jobs before others would agree to work for less money.

That is why Fed target the core inflation, ignoring food and energy components.

 

[FA_Q2]

I pay double for a gallon of milk than what I paid 5 years ago.

I feel your pain, but there nothing we can do about it. The economies in Asia and even Africa are growing faster than those in the developed countries. That means the commodities are getting more expensive relative to the American salaries.

Even if we could make the dollar milk price stable, it would mean cuts in your pay check -- and that is the ideal case. In reality such a policy would cause a recession, because a lot of people have to lose their jobs before others would agree to work for less money.

That is why Fed target the core inflation, ignoring food and energy components.

I never said that I wanted government to do anything about it. In essence, I think anything they do will make things worse before they re-stabilize to what they were going to be in the first place. What I was saying is that inflation is occurring no matter what the cause on basic necessities. That inflation is hitting those items is making that FAR worse.

 

[ilia25]

I pay double for a gallon of milk than what I paid 5 years ago.

I feel your pain, but there nothing we can do about it. The economies in Asia and even Africa are growing faster than those in the developed countries. That means the commodities are getting more expensive relative to the American salaries.

Even if we could make the dollar milk price stable, it would mean cuts in your pay check -- and that is the ideal case. In reality such a policy would cause a recession, because a lot of people have to lose their jobs before others would agree to work for less money.

That is why Fed target the core inflation, ignoring food and energy components.

I never said that I wanted government to do anything about it. In essence, I think anything they do will make things worse before they re-stabilize to what they were going to be in the first place. What I was saying is that inflation is occurring no matter what the cause on basic necessities. That inflation is hitting those items is making that FAR worse.

I highly recommend reading this guy:
Economics and Politics by Paul Krugman - The Conscience of a Liberal - NYTimes.com

 

[saveliberty]

I pay double for a gallon of milk than what I paid 5 years ago.

I feel your pain, but there nothing we can do about it. The economies in Asia and even Africa are growing faster than those in the developed countries. That means the commodities are getting more expensive relative to the American salaries.

Even if we could make the dollar milk price stable, it would mean cuts in your pay check -- and that is the ideal case. In reality such a policy would cause a recession, because a lot of people have to lose their jobs before others would agree to work for less money.

That is why Fed target the core inflation, ignoring food and energy components.

Why do you deny that doubling the price of milk is inflation?

 

[ilia25]

Why do you deny that doubling the price of milk is inflation?

Because by inflation they usually mean CPI, not the change in milk price. By redefining the meaning of a widely used term you only confuse everyone around you.

 

[saveliberty]

Why do you deny that doubling the price of milk is inflation?

Because by inflation they usually mean CPI, not the change in milk price. By redefining the meaning of a widely used term you only confuse everyone around you.

So, your suggesting the price of other consumer goods have gone down? link. Your the one confusing the issue by proposing inflation has not occurred.

 

[Quantum Windbag]

I pay double for a gallon of milk than what I paid 5 years ago.

I feel your pain, but there nothing we can do about it. The economies in Asia and even Africa are growing faster than those in the developed countries. That means the commodities are getting more expensive relative to the American salaries.

Even if we could make the dollar milk price stable, it would mean cuts in your pay check -- and that is the ideal case. In reality such a policy would cause a recession, because a lot of people have to lose their jobs before others would agree to work for less money.

That is why Fed target the core inflation, ignoring food and energy components.

You just described inflation, why do you insist it is not happening?

 

[Quantum Windbag]

I feel your pain, but there nothing we can do about it. The economies in Asia and even Africa are growing faster than those in the developed countries. That means the commodities are getting more expensive relative to the American salaries.

Even if we could make the dollar milk price stable, it would mean cuts in your pay check -- and that is the ideal case. In reality such a policy would cause a recession, because a lot of people have to lose their jobs before others would agree to work for less money.

That is why Fed target the core inflation, ignoring food and energy components.

I never said that I wanted government to do anything about it. In essence, I think anything they do will make things worse before they re-stabilize to what they were going to be in the first place. What I was saying is that inflation is occurring no matter what the cause on basic necessities. That inflation is hitting those items is making that FAR worse.

I highly recommend reading this guy:
Economics and Politics by Paul Krugman - The Conscience of a Liberal - NYTimes.com

I highly recommend using that for toilet paper.

 

[Quantum Windbag]

Why do you deny that doubling the price of milk is inflation?

Because by inflation they usually mean CPI, not the change in milk price. By redefining the meaning of a widely used term you only confuse everyone around you.

CPI usually means consumer price index, which is related to, but does not equal, inflation. By redefining the meaning of widely used terms you only confuse yourself.

 

[ilia25]

Why do you deny that doubling the price of milk is inflation?

Because by inflation they usually mean CPI, not the change in milk price. By redefining the meaning of a widely used term you only confuse everyone around you.

So, your suggesting the price of other consumer goods have gone down? link. Your the one confusing the issue by proposing inflation has not occurred.

When was the last time you have been in the electronics section? Or, for that matter, the last time you've bought a fabric softener?