Why you should be (mostly) happy about inflation-and really worried about something else in the economy, Brad DeLong says

[MULTIZ321]

Why you should be (mostly) happy about inflation-and really worried about something else in the economy, Brad DeLong says

Inflation may be a good thing for the U.S., argues one top economist

Larry Summers has been sounding the alarm on inflation for over a year, but a former colleague of his from the Clinton White House says it's "by and large" a good thing.

fortune.com

Richard

 

[Superchief]

Voodo Economics. What a bunch of bull. He is probably the advisor that told the administration they can pay for the Inflation Inflammation Act through reducing the deficit. High inflation hurts everyone, especially when it is followed by interest rate increases that increase the cost of everyone's debt.

 

[pedro47]

If inflation is good, why is my stock portfolio headed South of the Border.

 

[TravelTime]

I think a big problem is the government dumped too much money into the economy in 2020 and 2021. Not only that, they put a lot of money into the hands of people who did not need it. A bigger recession in 2020 with a slower recovery would have been better.

The government should have started raising internet rates many years ago. 6% mortgage rates are low. People are now switching to adjustable rates mortgages but that could be a bad thing if they keep raising interest rates. In 5 years, their mortgages could double. The government will need to continue to raise interest rates higher to slow things way down. They let the housing market get out of control.

I agree with his last point about stagflation. That seems like where we might be headed. It might not be a terrible thing if the stock market and housing market correct themselves and then return to normal growth.

 

[Carolinian]

This guy might try telling that to the people of Venezuela or Zimbabwe. Venezuela used to be one of the richest and most middle class countries in Latin America, but inflation has wrecked their economy and many are now fleeing across our southern border. It is possible to pan for gold flakes in many of their streams, and many shops there now much prefer customers paying with flakes of gold than with Venezuelan paper currency.

 

[Brett]

I think a big problem is the government dumped too much money into the economy in 2020 and 2021. Not only that, they put a lot of money into the hands of people who did not need it. A bigger recession in 2020 with a slower recovery would have been better.

The government should have started raising internet rates many years ago. 6% mortgage rates are low. People are now stitching to adjustable rates mortgages but that could be a bad thing if they keep raising interest rates. In 5 years, their mortgages could double. The government will need to continue to raise interest rates higher to slow things way down. They let the housing market get out of control.

I agree with his last point about stagflation. That seems like where we might be headed. It might not be a terrible thing if the stock market and housing market correct themselves and then return to normal growth.

yes, for some reason governments worldwide dumped too much money into the economy in 2020 and 2021

 

[Carolinian]

yes, for some reason governments worldwide dumped too much money into the economy in 2020 and 2021

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Energy costs are a big factor in inflation, and the EU socked it to their citizens with their "Green Deal" which sent electric rates through the roof months before the Ukraine crisis erupted, which just added fuel to the fire. Poland's prime minister announcing that electric rates would have to go up 40% due to the EU Green Deal told his countrymen that "what we have is the very expensive climate policy of the EU". Spain's deputy prime minster warned the EU that she was concerned about civil unrest due to the new energy policies and the increased rates they caused. More recently, the president of the Czech Republic blamed high electric prices on "Green madness" and the mayor of Antwerp, Belgium also blamed the EU green policies for the high energy prices.

 

[Superchief]

Energy costs are a big factor in inflation, and the EU socked it to their citizens with their "Green Deal" which sent electric rates through the roof months before the Ukraine crisis erupted, which just added fuel to the fire. Poland's prime minister announcing that electric rates would have to go up 40% due to the EU Green Deal told his countrymen that "what we have is the very expensive climate policy of the EU". Spain's deputy prime minster warned the EU that she was concerned about civil unrest due to the new energy policies and the increased rates they caused. More recently, the president of the Czech Republic blamed high electric prices on "Green madness" and the mayor of Antwerp, Belgium also blamed the EU green policies for the high energy prices.

The US is getting a double dose from the Green Deal. Not only have energy prices greatly increased, but significant amount of government wasteful spending is for unproven green energy sources and wasteful road projects putting in bike lanes in places where nobody in their right mind would ride a bike.

 

[MrockStar]

I avoid bike lanes, prefer sub streets or sidewalks.