Hacker News Reader

Comment by adam_arthur | Hacker News Reader

It was over $4T in stimulus, and extended far beyond individual stimulus checks.

Which doesn't even include forbearances that add a few T more in consumer spending power, or artificially low interest rates driven by the Fed

Here's your inflation: https://fred.stlouisfed.org/series/RSXFS

https://fred.stlouisfed.org/series/PI

Maybe you can clue some of the others into it. Not like we have the internet and easily observable datapoints that makes it quite obvious huh.

Instead have to hear the inane idiocy of economically illiterate people promoting policy that does the opposite of what they want to achieve

View on HN

If you include GDP next to those two graphs, then the story is quite different: retail spending is following the increase in GDP, and pay is lagging it: https://i.imgur.com/4VtMsBW.png

The stimulus bumps are quite visible, but subsequent data is right in line.

GDP is just a measure of total dollars spent in the economy. So of course if you print money and hand it to people, GDP goes up (nominally)

But personal income does not, which as noted is already observably a visible spike (from adjacent) in the graph you cited. So where is the driven increase in retail spending coming from since it observably is not being delivered from the government to citizens.

It does via inflation which is why it's rising faster than the pre-covid trend

You have so far failed to point to any metric such explains the inflation, which is what you claimed linking to those metrics did.

So apparently taking about personal income was just happenstance, since you pretty obviously were trying to say "it's rising wages that are doing it" and then have been backpedaling everytime I press you to explain why.

So we face successfully established there's inflation, and you've made no argument as to why we should think it's fiscal policy related rather than supply chain - you know, that big thing which has been stressed and suffering shortages repeatedly the last 2.5 years.

I have explained it, but your bias clouds your judgment, sorry.

Supply of effectively every good is higher than prepandemic. Demand is even higher. Retail sales have exploded vastly above trend due to fiscal injections. This is NOT a supply side issue, this is consumers mass buying which leads to shortages. If it were a supply side issue, you'd see big hits to corporate earnings, instead they became massively inflated due to excess consumer spending.

Personal income is rising much faster than sustainable for 2% inflation. Are you aware that money is nominal? People getting paid more means nothing if prices rise faster than they're getting paid. There's zero inherent value to a dollar.

Inflation is a product of supply and demand, not just one or the other. When there's an imbalance, prices rise to a new equilibrium point.

Go on, cheer for higher nominal wages as consumer sentiment sits at all time lows and real wages are deteriorating faster than any time in history

"Grain and gas and oil" all suddenly effected by an unprecedented and unexpected war, and disruptions in Asian manufacturing due to a historic pandemic situation, pent-up demand from lockdowns on a global scale, and your response is "nah, definitely not supply issues. No one would exploit a crunch to make even more money..."

> Supply of effectively every good is higher than prepandemic.

How can you possibly claim this? Where have you been for the last year? Energy embargos, dramatic slow downs in trade with China, excruciating shortages of basic/fundamental electrical components.

I have to assume that you have ignored all evidence that doesn't support your narrative. The trouble is this inflation would have happened with or without individual stimulus moneys.

Reply on news.ycombinator.com