return2ozmaNov 29, 2023

Americans need an extra $11,400 today just to afford the basics

https://lemmy.world/post/8939581

Americans need an extra $11,400 today just to afford the basics - Lemmy.World

Show threadAshMan85Nov 29, 2023
Eat the rich!
Show threadMenKlashNov 30, 2023
Eat the Fed!
Show threadRanvierNov 30, 2023
I mean if you’re gonna criticize the whole capitalist system sure. Within the confines of the current system and the inflation problem though they did a pretty good job. Not like there’s a good model of “how to deal with rapid inflation as economies reboot after a global pandemic” to follow. In hindsight maybe they should have started to raise interest rates sooner. But we were just starting a huge recovery and still trying to get everyone employed again. Even after inflation was starting the fear was raising interest rates would have to plunge the whole economy into recession and cause mass unemployment before inflation would get under. It’s kind of remarkable that this was avoided. Just look what happened in the 1970s and 1980s, when 30 year mortgages got up to 18%, real wages (your wages considering inflation) plummeted for a decade and didn’t really recover until the 2000s. In our current situation the real wages compensated for inflation have recovered as of this fall already. And we did it all better than the majority of other countries worldwide who were experiencing the same problems as their economies rebooted. Anyways, point is, probably as good of a job on the feds part with this current situation as anyone could have done.
Show threadMenKlash

I mean if you’re gonna criticize the whole capitalist system sure.

  • The Federal Reserve purchases assets and thereby increasing bank reserves.
  • The banks expand credit and consequently the money supply
  • All prices are raised, and the rate of interest is artificially lowered.
  • Misleading signals to businessmen starts to emerge, causing them to make malinvestments
  • Businesses overinvest in capital goods and underinvest in consumer goods
  • As the "time preference" of the public have not really got lower, consuming is preferred over saving
  • There is a lack of enough saving-and-investment to buy all the new capital goods
  • Then, "depression" originates in order to reestablish the consumer's old time-preference proportions
  • The banks return to their natural and desired course of credit expansion...

    • FIAT money is independent of capitalism. Its coercive existence leads to distortions of relative prices and the production system, as government and its central bank will always tend to be inflationary.

    Nov 30, 2023 at 2:56amWeb
    Show threadRanvierNov 30, 2023
    Exactly. I just meant for the context of the posted article about inflation and our existing economic system, fed did a decent job at bringing it down without crashing the economy, unlike the last time they gave this a go. I didn’t want to imply I was in support of grow at all costs eat the entire earth capitalism though. Not sure how long that paradigm is gonna be able to continue. It all comes back to eat the rich in the end.