The 12 hundo we got a year ago is currently tanking the economy? That’s what you guys are going with?

The problem is people tend to intuitively treat inflation as a micro issue, which it's not.


Avg. Price of consumer goods = Demand (consumer spending) / Supply (quantity of goods produced), or P = D/S.

So if we assume a fixed currency and (to keep it simple) wages as paid per piece , it's pretty straight forward that any increase in consumer spending would also entail an increase in the quantity of goods produced, basically leaving P unchanged. Consequently, if we do see an increase in P then we can assume either an increase in the money supply or workers getting paid and consequently spending the the same but producing fewer goods.

The problem with all that is while it works well enough in a relatively stable economy, the shocks to the system over the last couple of years doesn't make this at all straight forward. For instance, an increase/decrease in saving or an increase/decrease in credit card debt also affects D every bit as much as deficit spending. And with S, supply chain issues effectively decreases productivity and workers aren't paid by the piece. So while workers technically didn't get a pay raise, in the macro sense they were getting paid the same for producing fewer goods, which affects P just the same.

The problem with that « extra demand » is the last stimulus check send to American was like 16 months ago right ?

That a freakin long time to wait to spend that money on gaz , explaining prices of today isn’t ?

You guys didn't all hold onto your $1,200 for a year and a half so you could go wild buying gas?

Joe B = WINNING

The vast majority of inflation we have been experiencing is related to oil and gas prices. During the pandemic when there was a lull in the economy worldwide oil and gas prices plummeted massively. Oil for a brief period had a -$ price per barrel. Had I been President I would have declared a national emergency and bought up every last barrel of oil selling for less than $0. It would have gone into the National Reserve or sat in barrels on a US military base in rural areas.

Oil and gas prices have declined by over 20% recently (in the last 6 months or so). Yet we haven't heard a peep from Republicans thanking Biden. Whereas they are singularly blaming him for inflation in the first place.

During the pandemic there have been two congressional bills that have poured over a trillion dollars each into the US economy. One passed by Trump and one passed by Biden. This too affected inflation some. But what it did more of was keep the economy going when all hell had broken loose.

The other big reason for inflation is a result of broken supply chains. This in turn has increased demand. Biden's attempt to resolve chip shortages with his bipartisan help for US chip production unfortunately will only help in the long run in the event of another breakdown in chip supply. It will take years to impact the current shortages.

Nevertheless, the current bill that is hopefully going to pass in the Senate will stimulate price reductions in Health Insurance, Medicare and Medicaid. It will also increase the workforce in the IRS which in turn could help bring in up to $400 billion a year in unpaid taxes. That in turn might help bring down inflation in some areas as people who were cheating on their taxes will have less to spend.

Thanks Joe!

Sadly .
Seem baham think oil prices isn’t a commodity based solely on supply and demand but more based on narrative of future oil projets , shrug .

Biden is delivering millions of barrel of oil , weekly, on the market through SPR and yet baham thinks biden is responsible for high oil prices , by raising oil supply ???


Wish baham would be more precise on what actions or policies he speak about to explain biden faults but he went silent ….

Thinking stimulus checks dated over a year ago would be responsible for todays high oil price in Europe for example like ED said earlier is kinda of a huge unlikely statement to say the least .

But again , Fox News are specialists to use narratives and not facts since debunking generalities is almost impossible .
It’s when u ask facts and evidences that the house of cards start falling .

well it's because covid was long over by that point last feb our whenever..

i mean we're down to like 500 dead a day now..

Global inflation is very very high

Yes you may be right on what Fox is spewing but lets be honest "The Inflation Reduction Bill" is a total lie as well

Good luck convincing someone that something is a lie when it's a lie they want to believe.

This must be peak pot meet kettle.

Prices have come down quite a bit since the terms of this bill have been known and passage seemed possible to likely. Makes about as much sense to credit the Inflation Reduction Act for the quick drop in fuel prices we’ve seen over the last month as blaming 1200 dollar checks a year ago for the increase.

Talk about the tail wagging the dog. Inflation occurs when increases in the quantity of money outpaces increases in productivity. Where and how it occurs or manifests, eg, rising energy prices, asset appreciation, declining/stagnant wages, etc. are secondary effects, not causal drivers.

I was surprised to see the bill pass after having seen a dead-locked coalition for a long time. I'm sure it has compromises, but I am certainly glad the US is finally passing somewhat ambitious climate legislation at the federal level.

Thats certainly one view.

Yup and thousands of Green Jobs going to China and rebates for the rich to buy electric cars

That's certainly an analysis worthy of Twitter.

lol @ “the rich” being the only one buying EVs. Your talking points need to be updated.

So ?
Millions of jobs been transfer to China and around the world for decades and there lot more loophole in taxation for the rich then this little thing about EV …

in the grand scheme of thing it’s trivial .

Maybe ? Really ?
And what is the correlation with my point about inflation being worldwide from supply chain ?

Just try to do small politics that changes nothing about facts ?

Let’s just say what really hurts people isn’t the definition of inflation but real high prices from CPI , regardless if it comes from money supply expansion or a commodities supply shock .

But one thing is for sure , when oil prices are high it hurts 100% the regular consumer while an expansion of money supply do not necessarily do so
(Ie : high financials assets )

Break down the "lie" for us who aren't in the know like yourself

Agree, so long as the money goes into investment/saving. Otherwise if it's spent on consumption consumer prices are going up somewhere, somehow. And contrary to what some are implying itt, once that money is injected into the consumer economy it doesn't evaporate when it's spent. And there was a lot of money injected into the consumer economy as of late:



Like you said earlier itt:

Point being that fixing the supply chain issues or ending the war in Ukraine isn't going to help much to lower consumer prices. Welcome to the new normal.

It's not a view. It's the opposite of the deflation that occurs when productivity increases in a fixed-currency economy and prices decline.