Doesn't this depend heavily on inflation? With the ballooning US debt, how do people imagine the government will continue to pay interest without massive inflation in a few decades?
The interest we pay on the debt has just passed defense spending this year as a percentage of the federal budget.
I cant imagine how 4% inflation will continue to be the norm as the government has to print more and more money to pay for this stuff.
Which means instead of taxing the wealthy were paying them for the privilege of using their money.
So that could be a good thing.
When the rich were taxed heavily post WW2 the US was a pretty great place to live if you were middle class.
Not sure if that would work out still in a post-gold standard, modern uni-party ruling class USA where taxes may not be used efficiently.
Even some rich people question how little taxes they pay.
FWIW there have always been and will always be spelling financial doom right around the corner, but betting that way has been a failing strategy save for lucky few who got the timing just right.
Ditto Germany in 1945.
Ditto Russia in 1918.
Ditto China in 1949.
Is the US going to be the US of history for the next 50 years? Or is it going to be one of Japan, Germany, China, or Russia?
Or is it just going to be, say, the UK? How did the UK stock market do over the last 50 years?
If you think America (or wherever you live) is going to end up like Germany in 1945, or Russia in 1918, then it won't matter in the slightest what you've invested in anyway - you plus everyone around you will be in the same (half underwater) boat.
"Ditto" for if $SPY suddenly tanks or underperforms. There are going to be much more immediate concerns for everyone if that happens.
"Accounts" wrongly, though? 4% inflation for the next half-century seems like complete fantasy. How do you imagine it possibly being sufficient to address the ballooning debt?
It's the lower / middle class who have cash savings that get wrecked by inflation.
https://www.forbes.com/sites/jackkelly/2024/04/08/how-inflat...
Inflation is absolutely a way to steal the already meager savings of the working class.
The only way it wouldn't be is if that "new money" actually entered their local economy, which I'd love to see.
Sure [0]. You can also look at historical US rebellions, such as Shays' rebellion - where a principle demand of the working class rebels was that the US government print more money.
> Inflation is absolutely a way to steal the already meager savings of the working class.
Exactly why inflation is generally beneficial to the working class, generally their savings are insignificant while their wages are very important - it raises their wages while reducing the value of savings & debt, which hurts people who have lots of savings and helps people who are living off of their wages.
[0]: https://realtimeinequality.org/?id=wealth&wealthend=03012023...
https://www.nber.org/system/files/working_papers/w31775/w317...
There is an overwhelming amount of data pointing in the opposite direction.
This is easier to answer through simple logic though. Do you think the ruling / wealthy class would allow inflation if it hurt them? Perhaps, but personally I find it a bit naive.
Let's break down your claim though
> Exactly why inflation is generally beneficial to the working class, generally their savings are insignificant while their wages are very important - it raises their wages while reducing the value of savings & debt, which hurts people who have lots of savings and helps people who are living off of their wages.
Reducing the value of debt is a real possible winner, but that helps the rich just as much. And the poor person's debt, believe it not, tends to be of high enough interest that inflation isn't going to help them as much as you claim. Especially since they are subject to variable interest rates more than most.
Savings? Once again, this is cash for them, and for the wealthy it tends to be assets that are not harmed by inflation (either by growing with them or outpacing it).
So let's get to the final claim. It raises their wages. Is that true? The wage is inflated, but their purchasing power doesn't actually improve. It tends to go down, as the things they spend their money on are, you guessed it, inflated.
It's wild to think that inflation is helping folks at the bottom.
There's quantifiable data on this and it's looking problematic as of now.
Im guilty of this, just a few years ago I started researching it even though its been a problem for decades or more.
The news media puts wars on the front page and the debt on the back page if its reported at all.
In my opinion this one of the biggest existential threats to America and the main stream media isnt even raising any red flags.