What're you paying for Gas?

[Eagler]

$2.80 using Mobile smartcard..more for other credit or cash..

Eagler

[AKIron]

Other things went up besides eggs.

Look at the 10 year history.

https://tradingeconomics.com/commodity/beef

[CptTrips]

Other things went up besides eggs.

Look at the 10 year history.

https://tradingeconomics.com/commodity/beef

I didn't say other things didn't go up. 

Eggs went up more than the average because of the bird flu.

Other things went up for the reason I specified.  Mainly 20 years of loose monetary policy, starting with Greenspan, culminating in COVID checks and soon Tariffs checks.

You could call the COVID and Tariffs checks gov spending if you want.  But if the recipients banked it instead of going out and spending it then there would have been no inflationary pressure.  So it was the consumer spending that caused the inflation.

It was probably justified at the time, but the Fed should have been raising interest rates to compensate as soon as things opened back up.  They waited too long and acted too timidly.  COVOID response was a MASSIVE free money response on multiple levels.  That was going to have an effect.

[CptTrips]

Let me put it this way...

If the Fed put rates at 0% and kept them there we would get hyper inflation eventually regardless of Gov spending.

Even if the Gov stopped all spending 100% it couldn't over come 0% interest rates.

Therefore Gov spending doesn't "Cause" inflation.  At least not on its own.

In fact a strong argument is that ultimately it is Monetary policy.  Monetary policy makes t politically easier to spend when rates are low because Gov borrowing becomes cheap.

[Eagler]

Who wants to buy our debt at low interest rates...

Eagler

[AKIron]

I'm standing firm on this. The increase in printed money which the government spends is the primary driver of inflation here. It also creates a debt which will come due.

[CptTrips]

I'm standing firm on this. The increase in printed money which the government spends is the primary driver of inflation here. It also creates a debt which will come due.

Shrug.  People stand firm on believing in crop circles and that Elvis is still alive. 

I'm standing firm on the idea that inflation\deflation is cause by a mismatch between supply and demand that can be cause by a number of factors but is probably most effected by Monetary Policy.

Government spending is only ≈ 60–75% of consumer spending.  By far the consumer spending or not spending drives inflation and Fed can influence that by making their CC and home loans more or less expensive.

Gov can hand out free checks, but it is the consumer spending those checks (which they will reliably do, the Fed knows it) that drives the inflation.

[AKIron]

I consider any money that moves through the government to be government spending. The single biggest expense, Social Security, is a mixed bag. Retirement benefits are different from welfare though both are managed by the same org.

[Animl-AW]

Shrug.  People stand firm on believing in crop circles and that Elvis is still alive. 

I'm standing firm on the idea that inflation\deflation is cause by a mismatch between supply and demand that can be cause by a number of factors but is probably most effected by Monetary Policy.

Government spending is only ≈ 60–75% of consumer spending.  By far the consumer spending or not spending drives inflation and Fed can influence that by making their CC and home loans more or less expensive.

Gov can hand out free checks, but it is the consumer spending those checks (which they will reliably do, the Fed knows it) that drives the inflation.

Fact^*

People who understand the least talk the most, then repeat endlessly as if that makes it come true. I wouldn’t allow them to run a hotdog stand on two wheels.

[AKIron]

Fact^*

People who understand the least talk the most, then repeat endlessly as if that makes it come true. I wouldn’t allow them to run a hotdog stand on two wheels.

Just so you can see who agrees with you Trips.

[CptTrips]

I consider any money that moves through the government to be government spending. The single biggest expense, Social Security, is a mixed bag. Retirement benefits are different from welfare though both are managed by the same org.

To be clear, I'm not promoting profligate gov spending on dumb stuff. 

If the Gov wants to repair roads, bridges, airports and ports, I'm all for it.  I will even be OK with debt on that because I believe it will be a net economic benefit.

I'm OK with a strong military but I am beginning to question whether we need to spend more than the next NINE of our peers COMBINED.  That seems excessive.  The Soviet Union is gone and China and Russia aren't even pale comparisons.  I think we can stop building B2 and B2 after B2 after B2 just to mothball them in hangars. 

When you get that under control, I'd be willing to start discussing SS.

But all that is less that the effect of consumer spending.

[CptTrips]

Just so you can see who agrees with you Trips.

Well Nobel Prize winner Milton Friedman agrees with me too. 

I guess you can't win them all.

[Animl-AW]

When healthcare goes up and food prices don’t drop and mortgage and rent rockets, the last thing they will think about is gas prices.

[AKIron]

The overall principal is simple. The more dollars you add to a system with a fixed amount of goods the less each dollar is worth. The government prints those dollars and adds them to the system. Inflation.

[AKIron]

Socialized medicine was always the plan. I may get a politics ding for that so will not elaborate or argue the point. The details should be obvious though.