Now if I was some über rich dude with millions of capital tied up high friction investments, forced to choose between paying capital gains taxes or losing to inflation, i may feel differently.
Frankly, we need to put shitty businesses that exist by virtue of low interest rates out of business. It should not be feasible to buy thousands of single family homes as investment property, for example.
But your average Joe and Jill in the world working restaurants or deliveries, they can't just shrug it off.
The "poor" are, in fact, doing significantly better (economically, anyway) now than they were in 2019. I'll have to go look it up, but there was a great blog post a few months back looking at poverty statistics over the pandemic. The relief bills helped a ton.
Those are transitory, and even if they become permanent, never forget, inflation is a compounding process, so to keep up there must be the political will to re-up them. Moreover, the irony is that the way to fund the relief bills is to create more inflation.
You are advocating putting all of society on an accelerating treadmill that pushes people backwards towards poverty.
Exactly. So is the pandemic. And so is the resulting inflation. I think you agree with me.
Inflation is nothing but fucking over the people who can handle it the least.
It’s like has prices. They go up before the new delivery is in the grind tanks, but goes back down way after the expensive gas in the ground was all sold.
If we had the previous inflation measure (same as 1970s), CPI would be closer to double digits now (because of housing appreciation over the last year).
https://www.wsj.com/articles/inflation-numbers-1970s-cpi-hou...
Like it or not "home values" decoupled from "housing costs" over the past two decades. The reason for that metric change was to preserve equivalency, you don't get to argue backwards because of it.
The biggest losers among sophisticated, moneyed actors are indeed people who hold assets.
But the biggest losers overall are those with fixed incomes dealing with rapidly rising prices.
So, non-SS pensioners?
Not: Social Security recipients (it has an inflation-indexed COLA).
Not: public benefit recipients (this inflation is in part a product of temporary increases to aid at the lower end of the economic spectrum).
Not: low-end labor, where prices are being bid up. (And also, often a beneficiary of the previous point.)
If inflation were “good” then the US along with many countries the word over would cause it to happen —it’s easy to do.
Literally every single one of them that controls its own monetary policy (including the US) actively and deliberately does, so there's that.
What I mean is if what we have now (which is about double the norm) were good, we would have done it a long time ago and so would have others.
This is widely stated, but only barely accurate sentiment.
First, index funds do good at 1 thing - which is provide "market returns". Market returns is basically defined by an index, so naturally the definition is circular. The parent mentioned dividends, which are not the normal target for investors (but useful for retirees and others who want an "income" from investment). Dividend stocks may do worse at beating market returns, but better at income generation.
Telecom? Utilities? Mining?
And therein lies one of the big pseudo-centrist points here. A mild reduction[1] in fixed-rate entitlement programs is coming down the pipe at some point regardless. This essentially gets the hard part of that political calculus out of the way "for free" (or at least in a cheaper way, since you can blame covid).
[1] Contra the nutjobs who predict the Death of Social Security or whatnot.
No, if anything it hastens having to deal with the hard part, since SS benefits are wage indexed during employment and CPI-indexed in retirement, not fixed. Inflation drives up the nominal $ cost for current retirees, and, ceteris paribus, hastens trust fund depletion.
As far as I can recall, the current system is 'calibrated' for 2-3% annual growth. 5-8% is entering the banana republic inflation zone. You, know, where they'd have to 'devaluate' their currencies to make up the difference?
This is simply untrue. Like not even close the definition of hyperinflation used by economists. Hyperinflation is a monthly inflation rate of 50%, or 12974.63% annually.
This is scare tactics.
High inflation is what we had during the Carter years. People who lived though it say it was awful. Five per-cent may be on the cusp, but 8% is getting up there where it eats up a wage earner's buying power.
Your point seems mostly like demagoguery. I think the more interesting question is... is 5% actually bad? There's a real argument to be had here that rapid inflation reflects genuine improvements like rising wage levels and that it's worth paying for. Remember that the "biggest losers" in inflationary economies are people who hold assets, not investors (whose returns accomadate faster than things like loan terms) or wage workers (who don't have significant assets to depreciate and whose wages track inflation well).