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Comment by brianmcc | Hacker News Reader

Good. Now we can look forward to interest rate cuts to deal with the recession...

I hope not, I'm tired of this bubbly fake economy of the past decade. Massive misallocation of capital into pointless unprofitable tech companies

Yes, I hate seeing my 401K grow too. Let's have a recession, it'll be fun!

Is it really growing if it's a fake overstimulated economy?

If it means not kicking the ball down to my children's generation, so be it.

There are other public companies than unprofitable tech cash blockholes.

In a fake economy, money flows to the top, which includes people who have significant holdings in 401Ks. Most people never get paid enough to even fully save up for retirement by the end.

The opposite needs to happen actually. Prices for housing, used cars, and groceries are still out of control, and need to be reduced by 20-50%. Only way that happens is with higher rates (for houses and cars), and punishing suppliers for using the “supply chain issues” as an excuse to extort money from buyers (for goods and groceries).

There's a good argument to the contrary. People are struggling to fund essentials, 100% yes and need help. But higher interest rates won't help them and here's some thinking as to why:

https://www.prospectmagazine.co.uk/economics-and-finance/the...

This is UK focused but makes a pretty universal case.

Stagflation was last handled in the late 70s. The solution is to keep jacking rates up. We need mortgages at least 10 percent ;-) I'm assuming your comment was sarcastic. The expansion of the last 40 years has followed rather continual rate cuts which can't go past zero. We need to reset to higher rates and convince each administration not to cut rates to stimulate the economy but instead fix some things and stop insisting on exponential growth for eternity.

Hard to say we're seeing stagflation with current job numbers. It might happen, especially with the Fed being willing to increase rates, but it's not evident that's where we're at right now.

Remember that companies are really reluctant to part with already hired personnel. And that when recession-induced layoffs start they often look like an avalanche. We already can see the first trickles with the tech companies and it takes 9-12 months for rate changes to influence the economy fully.

Agreed, but it's also possible that tech sees greater cuts than elsewhere.

>> Hard to say we're seeing stagflation with current job numbers.

I thought the "stag" part was stagnant GDP and we are even in a recession. The inflation part is there of course. Even if it's not stagflation, the inflation part is due to dumping trillions into the economy and super low interest rates. I expect there to be a lot of pain when it actually corrects, but since there is also a trade war and companies are bringing production back to the US, we might see low unemployment for some time. I dunno, it's weird.

We bottomed out at 0% and have obvious bubbles even now. It would be really dumb to do that but I'm not saying they wont.

You can't grow infinitely forever. Eventually, you'll never be able to hit the target and it will distort things in really weird ways. Just look at the machinations Jinping Xi has had to pull off just to keep China going.

They have had positive GDP growth above 5% since roughly 1990.

Of course you can't, but who is to say that we will not grow indefinitely until 2500? Or even 3000?

I don't think we're anywhere near the limits of human productivity, let alone all the ways we can enhance it through innovations and mechanical aids.

I think it's a fair question to ask, but then I'd say you'd have to prove we have reached a plateau.

I would expect the fed to just keep rates stable instead of cutting them

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