Inflation means higher prices, which means higher revenues which means higher wages and higher profits. When profits are higher, more investors enter the business and create competition which brings inflation down. Inflation is part of capitalism.
Inflation means higher prices, which means higher revenues which means higher wages and higher profits. When profits are higher, more investors enter the business and create competition which brings inflation down. Inflation is part of capitalism.
Read what John posted! Facts!Quote:
Originally Posted by Judy
I still disagree, even with the premise of that definition. "unless interest rates are higher than inflation." That only works for Wall Street. If you are a borrower, you want interest rates low. That keeps the cost of that which you are financing down. But Wall Street is phony profit. It is not a return on investment in a company, it is speculation on where the company's "stock" will be in the future. It is pure gambling. But the higher stock numbers indicate the devaluation of the dollar. So actually nothing is gained.
The benefits you think come from inflation are a pyramid scheme, like Social Security. You have young (new) people coming into the system to finance the seniors who no longer contribute. It is not solvent. And this is the hoax in many public retirement plans. They are not self-sustaining. So tax bases must increase to hide the insolvency.
The only beneficiary of inflation is to government. When the dollar amount you earn goes up, so does your tax bracket.
The hamburger flipper who makes $10 per hour wants a raise to $15 per hour. Of course if they get it, everybody up the line gets an equivalent raise. So the Dollar Burger costs $1.50 now. And to cover that increase in cost everybody from the grocer to the UPS driver needs a raise to maintain their buying power. Now the hamburger flipper again, can't afford any more than he could at $10 per hour. But it looks good on government paper.
Yes, there is a temporary euphoria. Like drugs, you get a good feeling for a while. But that only last a month or so before the price of everything goes up correspondingly due to the inflation you cause with your raise. They you suffer the withdrawal. If you are uneducated about this cycle, you look at your new purchase power and knowing you can cover them, you spend, often on credit. But then when that inflation catches up with your raise, you are over your head in debt.
No, a stead dollar value is far more valuable than inflation!
I didn't get my education from Tee Vee or a British government-owned newspaper. But have at it. It would tickle me pink to see you and John sell your houses for what you paid for them (no inflation) and move to a rent control (no inflation) apartment.
jtdc wrote (excerpt):
I understand why you would think that, but there are others that benefit from inflation and it's certainly not the poor and middle class.Quote:
The only beneficiary of inflation is to government. When the dollar amount you earn goes up, so does your tax bracket.
In reality, inflation is theft from the middle and lower classes for the benefit of government, the wealthy, and also public union workers who have inflation adjusted benefits written into many of their contracts.
Government in particular benefits from a bigger piece of your paycheck via rising sales taxes, rising property taxes, and rising income taxes.
And Senior Citizens and private workers who get cost of living raises and all workers who get raises when spending is high and business is good which is what generates inflation. Everyone benefits from inflation, because they benefit from the good economy that drives it. But because the high prices are caused by high demand and low supply, investors say "I want me some of that" and they invest and start or expand companies to increase the supply which then levels off the inflation, so it doesn't last long. It's like an ebb and flow, a pendulum, a perfectly natural healthy occurrence, nothing bad about it, nothing to be "feared".
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No wonder you have these uneducated opinions!Quote:
Originally Posted by Judy
Why would we want to do that?Quote:
Originally Posted by Judy
And why do the need that but for inflation?Quote:
Originally Posted by Judy
I haven't seen "deflation" yet! You have a magical pendulum that only swings one way.Quote:
Originally Posted by Judy
You should get out more. But tell us who your income stream comes from and we'll gladly write letters and tell them to stop issuing cost of living increases. We wouldn't want you to be a hypocrite.
That's the catch! It is the rich getting richer on the back of the laborers that make them rich.Quote:
Originally Posted by MW
No rich person got to be a billionaire by breaking their back. Their employees made them rich. So if you gauge the economy by the profit for the rich, who make money with investment rather than hard work, it looks like inflation is a good thing. But it is an illusion covering the redistribution of wealth.
And that is one of the biggest contributors to inflation. In the private sector, employers stay in business by keeping their operation profitable. That means workers, even union workers have limitations. If they demand, and get too much pay, the company goes under and they are out of a job. And in many cases, the benefits they planned to live on for the rest of their lives are gone with that company. But public sector employees and union workers are guaranteed, no matter how unprofitable they make their employers. Unless it reaches a point like Detroit where the city goes belly up, the tax payers are forced to cover them, no matter what. And any government that has to be bailed out is purely inflationary. So government is the biggest cause of inflation, and inflation is bad.Quote:
Originally Posted by MW
If you produce an item, there is something tangible when you are done. If you want more money, you make more items. You will need lots of help to make a lot of items, meaning jobs. You can borrow money to grow overnight, but the interest is overhead that is added to the cost of your product. That is inflationary. I guess most of our inflation is this habit of borrowing against the future. We see the interest on our national debt is eating up much of our money that could be used to build and repair roads, and help many people. But the rich profit off of those interest payments and society loses. That inflation will run away, soon. If we pay as we go, like building a house one room at a time rather than going in debt to build the whole house all at once, we wouldn't be in debt.
Inflation is bad!