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2021 - Is inflation finally back in the conversation?

Reagan1k

By Reagan1k
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Humble Beast

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1 hour ago, jimmyjazz said:

Budget deficit decreased $350B a year ago, and is projected to decrease another $1.5T this year.  But sure, let's clutch our pearls without acknowledging the big picture.

Completely predictable.

US tax receipts went up almost 20% year over year due to the everything bubble. What do you think happens as economy normalizes? 

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Bateshorn
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The only thing more predictable than the GOP running up huge deficits on tax cuts and military spending, is each one suddenly becoming horrified by deficit spending 5 mins after a Democrat is sworn in

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Trey3216

Trey3216 15,325

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16 hours ago, Cheeseweasel said:

I agree that part of the solution is low interest loans for students. It's in our best interest to have an educated society. However, until we push back on the Universities, we'll never solve the problem. 

Until the government starts pushing back on, we’ll, the government for guaranteeing massive amounts of loans for bullshit degrees which require bullshit professors and bullshit department administrators and bullshit buildings to fund.  The federal government’s complicity in the skyrocketing cost of continued education is well-known, and is moreso the nexus rather than the universities themselves, even if the universities were more than eager to overspend to pump out the bullshit.   

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Cheeseweasel

Cheeseweasel 26,437

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11 hours ago, jimmyjazz said:

Budget deficit decreased $350B a year ago, and is projected to decrease another $1.5T this year.  But sure, let's clutch our pearls without acknowledging the big picture.

Completely predictable.

The deficit has been smaller under the Biden administration than it was at the end of President Donald Trump's tenure. But the deficit has been bigger under the Biden administration than the nonpartisan federal Congressional Budget Office had projected it would be if the Biden-era federal government stuck with the laws that were in effect when Trump left office in early 2021.

https://www.cnn.com/2022/05/09/politics/fact-check-biden-deficit-reduction/index.html

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Captainant

Captainant 27,465

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1 hour ago, Trey3216 said:

Until the government starts pushing back on, we’ll, the government for guaranteeing massive amounts of loans for bullshit degrees which require bullshit professors and bullshit department administrators and bullshit buildings to fund.  The federal government’s complicity in the skyrocketing cost of continued education is well-known, and is moreso the nexus rather than the universities themselves, even if the universities were more than eager to overspend to pump out the bullshit.   

UNGA BUNGA EDUCATION BAD!!!!

The rising cost of higher education is a function of our state contributing less and less to universities, and the creation of student loan backed bond sales. People shouldn't be profiting off of student debt. If education is merely an economic transaction, you're going to be leaving out the third of the country that is too poor to participate in economics

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Trey3216

Trey3216 15,325

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15 minutes ago, Captainant said:

UNGA BUNGA EDUCATION BAD!!!!

The rising cost of higher education is a function of our state contributing less and less to universities, and the creation of student loan backed bond sales. People shouldn't be profiting off of student debt. If education is merely an economic transaction, you're going to be leaving out the third of the country that is too poor to participate in economics

Where the fuck did I say education is bad?

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ChickenSandwich

ChickenSandwich 9,798

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2 hours ago, Cheeseweasel said:

The deficit has been smaller under the Biden administration than it was at the end of President Donald Trump's tenure. But the deficit has been bigger under the Biden administration than the nonpartisan federal Congressional Budget Office had projected it would be if the Biden-era federal government stuck with the laws that were in effect when Trump left office in early 2021.

https://www.cnn.com/2022/05/09/politics/fact-check-biden-deficit-reduction/index.html

But the main factor is that temporary pandemic relief spending has been ending, bringing federal spending down from extraordinarily high levels.

 

Marc Goldwein, senior vice president at the Committee for a Responsible Federal Budget, an organization that advocates deficit reduction, said in an interview that Biden's claims about having personally reduced the deficit are "almost bizarro world," a reversal of reality. The deficit would have fallen by much more "had President Biden come to office and not done anything," he said.

 

But so far, he said, Biden has "done lots of things that have increased deficits" -- from signing the pandemic relief package to signing a major bipartisan infrastructure law to boosting food stamp benefits to extending the Trump-era pandemic pause on federal student loan repayments -- and has "passed no pieces of legislation to directly reduce deficits."

Edited by ChickenSandwich
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Captainant

Captainant 27,465

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9 minutes ago, Cheeseweasel said:

Aggy sucking doesn't mean college football sucks.

No, but when you're arguing that college is expensive primarily because of "bullshit professors and bullshit department administrators and bullshit buildings" it certainly does sound like you just want to cancel any non-STEM (read: unprofitable and/or bullshit) degrees, which is how I interpreted him

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Trey3216

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25 minutes ago, Captainant said:

No, but when you're arguing that college is expensive primarily because of "bullshit professors and bullshit department administrators and bullshit buildings" it certainly does sound like you just want to cancel any non-STEM (read: unprofitable and/or bullshit) degrees, which is how I interpreted him

So you think the federal government encouraging people to take on massive amounts of education debt for a degree that will never earn them the ability to pay off said debt is a sound business model?  Got it

that government guarantee enables universities to spend millions of dollars on new buildings and departments for said degree programs, increasing the bloat, and massively increasing the cost for doing business for everyone.   
 

im all for higher education.   We definitely need a lot of non-STEM programs to function as a society.  
 

I also don’t feel the business of higher education is allocating resources in an intelligent manner, and they do it because the free money train for them is perpetual at the behest of the federal government.   

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Captainant

Captainant 27,465

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8 minutes ago, Trey3216 said:

I also don’t feel the business of higher education is allocating resources in an intelligent manner, and they do it because the free money train for them is perpetual at the behest of the federal government.

But you would say getting a trilly in tax cuts and using that to buy the largest ever round of stock buybacks to enrich shareholders at public expense, and TOTALLY not affecting inflationary trends whatsoever amirite, is an intelligent allocation of taxpayer resources?

Because this is less money going out now, and I sure don't remember any complaints back then. 

I don't disagree that higher ed isn't fucked seven ways to Sunday. But last I checked, privatizing things further and limiting the scope of degrees offered as equals is only going to make things worse. 

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Cheeseweasel

Cheeseweasel 26,437

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Friday Surly Rant:

“You wasted $150,000 on an education you coulda got for $1.50 in late fees at the public library.”

The fact is that the VAST majority of people defaulting on student loans are people who didn't finish their education. They got sold a bill of goods by a system that pushes kids to college that shouldn't be there for a variety of reasons. We should guide these kids into work place training, community college, etc. to get them an education that is inexpensive and will actually advance them in their careers. Being debt free at 25-30 gives people a HUGE advantage. Why are we pushing them into debt slavery?

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Trey3216

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9 minutes ago, Captainant said:

But you would say getting a trilly in tax cuts and using that to buy the largest ever round of stock buybacks to enrich shareholders at public expense, and TOTALLY not affecting inflationary trends whatsoever amirite, is an intelligent allocation of taxpayer resources?

Because this is less money going out now, and I sure don't remember any complaints back then. 

I don't disagree that higher ed isn't fucked seven ways to Sunday. But last I checked, privatizing things further and limiting the scope of degrees offered as equals is only going to make things worse. 

Jesus, you constantly assume everything under the sun

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Hefeweizen

Hefeweizen 5,307

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Well put.  We need a real apprenticeship program and we’re failing kids who have no business going to any college by pushing them there.  
 

Back to inflation.  I think we’re going to see another wave before things start decelerating because my feeling is the Fed wants to show this down faster but hasn’t done enough.

 

A lot of home builders starting to shut down deals now .  They think this could last 18 months from the ones I’ve been talking to.

 

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Captainant

Captainant 27,465

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Just now, Trey3216 said:

Jesus, you constantly assume everything under the sun

Lol. Guys. Let's talk actual and specific reality here then. Your thesis is that college is expensive because of the glut of "bullshit" degrees that won't pay for themselves. Take a look for yourselves. 

https://catalog.utexas.edu/general-information/appendices/statistical-summaries/

What degrees would you broadly call "bullshit"? Let's talk outside of rhetoric, be specific. Because looking at that, there's far more hard science and "stem" degrees conferred than liberal arts (presuming that's your bugaboo that you won't put a name to). A ton of masters programs too - all of which are critical for the undergrads education as well. Who do you think actually runs office hours and grades shit?

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statsman

statsman 5,425

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I was a freshman in 1981. I remember classmates with better off parents describing how they were told to borrow as much as possible in student loans (at subsidized rates), even though it wasn’t needed. They would put that money in CDs (paying higher rates, net of tax, than the interest), for an arbitrage play. Crazy times. 
 
For now? I think every college student should borrow $10k per year, at least, regardless of need, at least until the government starts asking for payments again. After all, there is a good chance they’ll never need to pay it back. Nobody wants to be a sucker, right?

 
And that is another way this “edict” is inflationary. Colleges know they can raise prices, and there will be more students than ever. Why shouldn’t everyone go to college if they don’t have to pay for it. Nobody wants to be a sucker (like those of us who didn’t take out student loans). 

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6 hours ago, MirrOlure said:

So when (if we haven’t already) do we begin the conversation that Powell is a massive failure and already ranks among the worst, if not THE worst Fed Chairs in modern history?

Dude needs to be Ari Golded yesterday.

Is this serious? Because inflation is running high, like it is around the entire world coming out of the major disruption caused by a pandemic? What other country would you rather be in right now economically? 

Why don't you give it some time before staking him as the worst? The Fed was slow to raise rates -- no argument there. But he also threaded the needle through the worst of the pandemic, which demand and jobs roaring back. We've gotten some uncomfortable inflation... and that's it so far.

This isn't even the second-worst economic period this century. Could change, but to say he's the WORST EVAR!!!1! right now is silly.

 

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jimmyjazz

jimmyjazz 45,560

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59 minutes ago, statsman said:

Frankly, I wonder if the Volcker game plan even works if the government keeps pushing through hundreds of billions in “Inflation Recovery Acts” and tuition forgiveness. Aren’t we wasting the medicine?

You may be right.  I've been thinking that it's possible none of the economic models are worthwhile any more.  No hard evidence, but there is a lot of "hmmm" out there (high inflation, low unemployment, etc.).

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52-80

52-80 19,096

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i like the shorter announcement powell put out this week, comparing the differences of inflation during his regime vs volcker's, and why volcker's treatment is not relevant/necessary.

he said that volckers spiraling inflation was also driven by expectations of inflations (which is generally true of many things, imo).  e.g. producers buy less to prepare for reduction in spending, but consumers buy more to hoard shit [my interpretation]. 

so for powell, besides the actual lever of rates that he has, the other tool is actually in setting the tone and expectation...which is why of course theyve been so mild and measured in their messaging, as compared to the ideologues and demagogues who actually appoint them into office.

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bernorange

bernorange 8,348

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11 hours ago, 52-80 said:

i like the shorter announcement powell put out this week, comparing the differences of inflation during his regime vs volcker's, and why volcker's treatment is not relevant/necessary.

I haven't read his statement, but the shift from holding long term debt to short term debt puts a constraint on the current Fed that Volcker didn't have to worry about.  Jpow can't raise rates like Volcker did without bankrupting the country.

 

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washparkhorn

washparkhorn 9,935

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16 hours ago, jimmyjazz said:

You may be right.  I've been thinking that it's possible none of the economic models are worthwhile any more.  No hard evidence, but there is a lot of "hmmm" out there (high inflation, low unemployment, etc.).

We killed off the Philips Curve over the last two decades. Unequal distribution of wealth broke the model. 

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Humble Beast

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On 8/26/2022 at 10:26 AM, MirrOlure said:

So when (if we haven’t already) do we begin the conversation that Powell is a massive failure and already ranks among the worst, if not THE worst Fed Chairs in modern history?

Dude needs to be Ari Golded yesterday.

It’s Bernanke and not close. Was in charge when the unofficial mandate to maintain stock prices was implemented. Bailed out foreign banks to the tune of 100s of billions. Maintained zirp and QE well past their usefulness. Then he cashed out as an “advisor” to two of the biggest hedge funds that benefited from his extreme policies. Total scumbag. 

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Bozo_Casanova

Bozo_Casanova 26,284

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1 hour ago, washparkhorn said:

We killed off the Philips Curve over the last two decades. Unequal distribution of wealth broke the model. 

That’s a a very interesting and intuitively sensible idea and I’m going to have to think about that.
You still caping for The Bush tax cuts? Serious question.

Edited by Bozo_Casanova
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washparkhorn

washparkhorn 9,935

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Velocity of money tells the story.  Check out the uptick in inflation as velocity picks up. The trillions transferred to the wealthy idles was not inflationary (they tend to hoard and shelter, not spend). Give money to normals, and they spend it, usually out of necessity or perceived necessity. 
 

fredgraph.png?g=T9vB

 

As for the Bush cuts, the PPP silliness made mincemeat of my argument in the early 2000’s. The lumpenproletariat business owners, with limited exceptions, care little about community or economy building; they just want to head out on a Carnival Cruise and gorge on all you can eat offerings of slop and gruel. 

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jimmyjazz

jimmyjazz 45,560

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1 hour ago, washparkhorn said:

Velocity of money tells the story.  Check out the uptick in inflation as velocity picks up. The trillions transferred to the wealthy idles was not inflationary (they tend to hoard and shelter, not spend). Give money to normals, and they spend it, usually out of necessity or perceived necessity. 
 

fredgraph.png?g=T9vB

 

Did inflation pick up in the 3 small upticks in M2 Velocity prior to this one?  Honest question, don't have charts in front of me.

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troph

troph 24,563

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Heard a pod cast recently said there are 16m with long Covid, who are part time or no time at work. That’s 1.5-2% or so of the work force so it’s going to take more time to absorb the loss of workers. Could partly explain tight work force, companies were already operating with a workforce deficit so it’s going to take time for a labor recession to show up. Not to say it will, I’m still somewhat hopeful this lands without too much lasting damage. 

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Relieving individual debt to colleges incentivizes them to lower costs how?  Unless, he is summarily telling them to fuck off, and writes off the debt, but unless I am mistaken, the schools already got their money.  Schools are not the lenders.

 

They just throw some pretty words in a bowl until it sounds good or what?  It's a victory lap for lighting money on fire.  Our money.

Edited by slorch
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Humble Beast

Humble Beast 258

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Crossposting from global spring thread. Noted Ctedit Suisse analyst I’ve shared here before. 
 

https://plus2.credit-suisse.com/fed2f2e0-3c1f-43f2-82b9-47b2159f15d3


Relevant to inflation thread. The kind of spending initiatives he sees as necessary and likely are going to be massive. The amounts along with continued de-globalization will continue to boost inflation.

Also he ends with key point that for a couple key reasons there’s almost no reason for our adversaries to roll over their existing US debt into new debt purchases.
 

More support for the idea that the Fed will have to step in bond market in a big way.

 

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Captainant

Captainant 27,465

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2 hours ago, slorch said:

Relieving individual debt to colleges incentivizes them to lower costs how?  Unless, he is summarily telling them to fuck off, and writes off the debt, but unless I am mistaken, the schools already got their money.  Schools are not the lenders.

 

They just throw some pretty words in a bowl until it sounds good or what?  It's a victory lap for lighting money on fire.  Our money.

Eh, that's one portion of it but there's also planned rule changes to "hold career programs accountable for leaving their graduates with mountains of debt they cannot repay" and go after debtmills like ITT tech and the like, reduce the financial burden of educational loans with payment caps based on discretionary income, and rule changes for the dept of education to actually hold colleges accountable for bullshit fee increases

Sounds like a lotta sour grapes for what appears to be a solid step in the right direction considering we're never gonna get a perfect solution

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