soulshaver wrote:
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Everything costs twice as much, but there's twice as much money to pay for it.
And who has access to that money? Are all of you getting raises right now? Are any of us going to be getting raises due to inflation?
If we're talking about true economy wide inflation, then yes, you will get raises to adjust for it, just as you do all the time. It's just that you've lived your entire life during a time period in which inflation has rarely peaked much above 3% or so, so you can't grasp what happens when inflation is higher. You get bigger raises each year exactly because the value of your labor compared to other factors hasn't changed (but those other factors are worth more dollars). If your employer has to pay twice as much to buy the materials his business consumes, and he charges twice as much for the end product, then what on earth (aside from bizarre paranoia) makes you think that he wont also be paying twice as much for his labor costs.
You're thinking that dollars have intrinsic value. They don't. The value of the labor of a soapmaker is tied directly to the value of that bar of soap he makes on the market. If his boss can sell that bar for twice as much, the value of the guy who stirs the soap vats will go up by the same amount and he'll pay that person an equivalent amount more.
While some people have argued that this doesn't always happen due to greed by the business owner, and that can happen in a non-inflationary situation (ie: demand for soap goes up, so cost goes up, but owner doesn't pass that on to the employees), but it *can't* happen if the cost increase is the result of inflation. Inflation occurs economy wide. It's not like suddenly the rich people have twice as much money to spend and could choose not to spend it on labor. It's a step by step process. Wages going up is as much a cause of inflationary pressure on other parts of the economy as anything else (and arguably, one of the stronger pressures).
There can (almost always is in fact) be some delay between when one factor in the economy inflates and others follow suit and this can result in wages following prices. But it can also go the other way around. If wages rise too fast, it'll drive up prices as well. And that's just two of a multitude of factors involved.
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The average worker will NOT have more money and WILL have to pay more for goods and services, making it more difficult to pay off their debts and more difficult to afford basic essentials.
Only if you assume some magical process occurs which makes the cost of goods go up but not wages. While it's possible, that's not what inflation typically does.
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Or maybe we can just get access to more loans right? Take out some debt to pay off your other debts...what a great idea!
I really do suspect you're still stuck thinking that dollars have intrinsic value. I'll repeat again: They don't. Each "thing" in the economy has a value that's relative to the other "things" in the economy. Sometimes those relationships are simple (like the value of a soapmakers labor to the value of a bar of soap), sometimes they are much more complex. But they are always relative. And while it's certainly possible for specific sectors of the economy to become more or less relatively valuable, that's *not* a result of inflation.
In this particular area, the thing to worry about isn't inflation but employment rates. If too many businesses crash or have to downsize, people lose their jobs. That increases the relative amount of people looking for jobs compared to the number of available jobs. That will decrease relative wages. Inflation wont (except for short term shifts). Unemployment will.
So if you're really worried about wages, you need to be looking at the health of the employers out there, not inflation.
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They are pushing people and businesses into bankruptcy so that they can buy out foreclosures.
Lol! Who's "they"?
Have you been paying any attention at all to the economic problems over the last year and a half? The very very last thing "they" want to do is foreclose on people's loans. Seriously.
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True enough. The problem is modern-money-mechanics and the METHOD we are using for inflation. I can imagine a stimulus that would do good (which would cause inflation), but it has nothing to bailing out banks or auto companies or any other terrible business ideas. We can create government jobs in the energy industry to begin with, but that is a different topic.
That helps in the short term, but deepens a recession (and can lead to full depression) in the long run. Government job programs only work if the value generated by the labor is actually worth doing. Remember when I said earlier that the value of labor is related to the value of the things that labor produces? If you give people jobs for the sake of giving them jobs (busywork), you end out creating the equivalent of (for lack of a better term) "employment inflation". In the same way that printing up twice as much money will make each individual dollar worth half as much, if you just hire twice as many people, but the output is the same, then you've actually just cut the value of labor in half. That *will* lead to wage drops over time.
Job programs have to actually do things that are worth doing. Just hiring more bodies to do the same amount of work may help those individuals in the short term, but absolutely screws the whole labor market in the long run. It's a very very very bad idea...
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I'm not talking about our money that is FDIC insured in the banks, I am talking about the deficit and the 8.5 trillion dollars we are forking over to these criminals to try to indebt our way out of debt.
Was I supposed to look into a crystal ball to figure that out? You specifically said that banks would take our money, then go bankrupt, and we'd never see a dime of it. Silly me for assuming you were talking about our money in those banks.
Now. If you're talking about taxpayer bailout money that's a whole different topic. And one I kinda agree with (to a degree). I'm not sure exactly how that relates to the national debt though. If we borrow money to bail them out, then the debt will go up. But that doesn't take it directly from us (not today anyway). If they raise taxes to pay for it, then you're correct. They're taking our money and we should think about it long and hard. Now, if they print up some extra money, then that leads to inflation, which comes back to the original topic.
Where the money comes from is kind of important. We can all go off on wild tangents, jumping from assumption to assumption, but that's not terribly helpful IMO...