It’s exacerbated by stimulus spending. Money is printed and spent in areas meant to stimulate more spending. That devalues the dollar and diminishes the value of savings.
I really can't see how inflation is in any way dishonest. Not to mention the amount of money maid via taxes(1.5 trillion) absolutes dwarfs any revenue from seigniorage(65 billion).
https://economics.stackexchange.com/questions/16075/usa-seig....
Also, when the government borrows money and the fed buys notes to keep borrowing rates low, that still produces inflation. The fed is sitting on about 4T$ in bonds as of now.
Assuming interest rates aren't 0 or near 0 that's true. But recently inflation has been consistently lower than historical norms.
You don't get a vote. You get increased prices and reduced purchasing power whether you like it or not.
Second, this is a typical "boiling the frog" type of taxation, which is slow and spread over long periods of time (typically portions of whole lifetimes) and even people with enough brains to understand the problem don't really pay attention because it's never felt as an immediate pain.
Presumably the grandparent sees this conduct as more dishonest than what was discussed earlier, because it does not require a accompanying public statement, which states explicitly that money is taken out of taxpayer's pockets.
The fact that people keep money under mattresses is a failure of the educational system, not a failure of monetary policy.
Think about that for a minute
Both. In the end, everything is a commodity
— Apologies to Baudrillard
Also imagine a person keeping 3000$ for a rainy day. He can't buy stocks, because rainy day could come at a stock dip. Losing 23% of that money in 5 years (assuming 5% inflation). How is it a failure of an educational system, not monetary policy?
By the way, this is what happens today with the USD (or any fiat currency). It doesn't need to be "digital" (it already is).
Unless your retirement savings is literal cash stuffed under your mattress I have trouble imagining how inflation sabotages it
So, case study, Uber/Lyft fucked drivers out of employee status, thus fucking the need to offer a retirement fund. Real piece of shit companies. Hopefully those people can store their money in a 0 interest rate Savings account, or get smart and dump their entire diddly squat income into AAPL for decades (you know lock up their capital and live frugally). This stuffs gonna come back on us if we’re doing this across industries.
There is no retirement, there is only social security realistically speaking for the majority.
It is what it is. Gotta love the new gig economy too, those people are truly fucked. Everyone’s going to work until they die basically. We see that current retirement age generation is fixated on social security/medicare (literal single issue voters, don’t touch their retirement cash flow), but I don’t think anyone in Gen X/Millennial/Z realizes just how much more obsessed they will all be about those two funds going forward. You’ll have three generations that will literally only care about that, just like their grandparents before them.
Oh, and it’s going to be three generations worth of old people that will need a massive fund to finance all of those social security checks because we fucked them out of realistically keeping up with inflation.
As to your case study of a low wage worker, if he doesn't have any assets, inflation doesn't mean much. If he has debt, which he likely has, student debt say in the US, inflation is a good thing. The (correct) conventional wisdom is that debtors benefit from inflation and creditors don't.
And if you've got money in a pension fund like many Americans, or you have index funds, or you have anything else that broadly represents the economy, cash flowing into the economy rises prices but it also appreciates assets.
There really isn't any point to fear moderate inflation from the standpoint of a worker. If anything the opposite is true.
I agree with the fact that gig work is terrible and lots is wrong with economic insecurity, but steady inflation isn't an issue.
I’m going to step away from the word correlation because I think it will lead us down a never ending path.
Wages are not keeping pace with inflation. I’m not saying it needs to be 1:1, but businesses have managed to stunt wage growth at a much lower multiple. That is one hell of a tax on people’s wealth.
So now the question is, is what I just said true? Year after year there’s tons of data and literature on how wages haven’t budged in relation to inflation. The public is constantly being shown these arguments similar to Climate change.
I think ultimately the government doesn’t care that your earning power is not keeping pace because it is thematically consistent with what monetary easing is trying to do. The whole point is to not let your money sit around and appreciate, the whole point is to have your money in fight-flight mode at all times to keep the economy from stagnating. There is nothing in that policy that has anything to do with increasing your earning power or raw appreciation of your current wealth.
So be it, the failure here is that if the average person’s money needs to be put to work, there has to be more vehicles available to the average person. When your typical business doesn’t even offer a 401k, when wages only grow at a 0.1-0.3x of inflation, you can’t reasonably expect someone to stow away the max 5k contribution yearly in an independent IRA. Your average worker is simply not able to do this, and this is the failure I’m mostly speaking to.
Lastly, the word pension is a vestige. I worked at a large Corp that had pensions once. When I got there, there policy changed so that anyone after around the late 2000s would not receive a pension, and they would stop adding to the pension fund for those that came before. Millennial/Z will never hear the word pension again, so it’s not a fair point to make.
The best current generations can do is save for a down payment on a house, and be locked financially to the mortgage payment. To have a fighting chance at this in these crazy housing markets, you need to make some sacrifices to hit that down payment. Nothing else about our system is going to help you, and all monetary policy is trying to outpace you at this point globally.