This came up in another thread and was somewhat off topic, so I decided to create this thread to explore the issue.
yes it is This happened right before Covid to keep the Trump economy afloat, then Covid hit, double whammy Trump was on the verge of a recession in 2019... BEFORE COVID the fed doesn't do this during a great economy... that the economy was great pre-covid is one of the biggest lies the Republicans ever told. "Fed Ups Its Wall Street Bailout to $690 Billion a Week as Media Snoozes" Oct 2019 https://wallstreetonparade.com/2019...ilout-to-690-billion-a-week-as-media-snoozes/ and "The Federal Reserve Has Already Pumped $9-Trillion into Wall Street in the Past Six Months, and Now Is Offering Banks Another $1.5-Trillion" March 2020 https://needtoknow.news/2020/03/the...d-now-is-offering-banks-another-1-5-trillion/
I would argue that inflating the money supply, and causing the price of people's money to go down, is a bad thing. Essentially a stealthy redistribution of wealth.
especially if as the last admin said in 2019, the economy was the best ever.... that is not the time to dump trillions and trillions into the economy right?
. "Trump's economy"? Don't you mean "COVID's economy"? You think Trump spent all that money on a whim? Chased all those people out of their jobs; made them go home and stay there?
that happened BEFORE Covid, Covid was not here in 2019 Covid came right after... that was a double whammy
There are two components to interest rates going up. One is that interest rates are going up to keep up with inflation, and the other is that due to recent increases in inflation, the Fed cannot afford to keep lending out money trying to continue to hold interest rates down, because that would contribute to more inflation. If someone is lending you money at a 3% interest rate when there is no inflation, then if there is 2% inflation they will have to charge a 5% interest rate to be able to get the same returns. And if the Fed loans out money at a subsidized rate (at an interest rate lower than what it would be in the private free market sector), then there is a cost to that. And that cost ends up being paid for by inflation. The more inflation there is, the more inflation is caused by trying to hold down interest rates. This is why it's impossible for the Fed to hold down interest rates as low as they want forever. The Fed can only hold down interest rates so much for so long. Eventually it begins leading to vicious circle of inflation, and that circle has already just begun.
Before COVID inflation was around two percent, unemployment was at record lows, including for women, non-whites and other marginalized groups. Stock markets were booming and people were paying less taxes. It took a pandemic for Trump to record a trillion dollar deficit; Biden did that this your by July.
yes, then the FED dumped about 10 trillion into the economy in 2019, and who knows how much during covid.... thus inflation
Its one of the causes. Other causes were supply side problems & wage growth. Not sure why you want to discuss everything on 3-4 separate threads.
I don't think anyone is saying the economy was great before Covid. But the shutdown in response to Covid harmed the economy. No one doubts that.
If the issue was really supply side problems, then we would have expected prices to go back down by now. They haven't. So there has definitely been some inflation between then and now that was not merely just caused by supply side problems.
And it was sloppy of me not to define my terms. By "inflation" I mean inflation of the money supply and commensurate price drop of the dollar.
Trump was the President, and they were his guidelines to America as you well know, yes, States should have ignored his guidelines
corporations are quick to raise price, slow to lower them, if ever if prices to not come down, wages need to go up
don't disagree, but not as biggly and usually the fed doesn't try to stop wage growth during it to the degree it did here - historically congress usually raises the min wage to match
I specifically mentioned 3 causes. Price of lumber shot up from $400 to $1600 and then back to $400 when supply was fixed. Price of eggs was high for a while, but now returned to normal level. Prices are never going to be the same, since wages also wet up fast and at the moment wages are growing faster than inflation, so at least some of the purchasing power is being restored See above Its called reduced purchasing power. As for price of USD vs other currencies, the USD has fared pretty well. For example the British pound is at a record low compared to USD. I am not going to repeat everything here since you have a habit of insisting having the same conversation on 3-4 different threads Wages are going up faster than inflation, but it will take tine for it to catch up.