Posted on 10/25/2023 7:50:35 AM PDT by FrozenAssets
The leading cause of runaway inflation is government spending. These people will spend ridiculous amounts of money for mundane items. No one ever does the math. Probably because they attended public school.
https://www.newsminer.com/news/local_news/borough-receives-10-million-epa-grant-for-stove-changeouts-natural-gas-expansion/article_0d2768f8-72b7-11ee-96aa-fb4e1900fac7.html
https://www.adn.com/alaska-news/anchorage/2023/10/24/proposed-bond-measure-would-bring-more-public-restrooms-to-anchorage/
In the first article EPA figures that 10 megabucks will change out 335 wood stoves. $29,850 to change out a wood stove?
In the second article Anchorage wants to float a 12,500,000.00 bond to put up 24 public restrooms. $520,833.33 for a modular restroom?
And this is only one tiny example of the idiotic spending that goes on.
Too many dollars chasing too few goods.
Inflation is caused by one thing and one thing only: Government printing more dollars than the Gross Domestic Product.
Bingo. Econ 101 first week lesson.
The biggest culprit is government/fed printing of more money.
As FrozenAssets puts it “Too many dollars chasing too few goods.”
There are other culprits too. Most of them driven by law, such as mandatory insurances. This drives up prices, even if there is competition between private insurance companies. You have a still captive audience.
So government is the bad gas in almost every inflationary cause.
Another one that rarely gets mentioned is taxes. If you combine all forms of taxation, from federal down to local, also sales tax, and property taxes, the burden for the average working person is more than 50% of their income.
The reason taxation creates inflation is not just because it takes money out of the private (consumer) sector, but also because the public sector produces nothing and is EXTREMELY inefficient at the services that it discharges, again, because there are no competitive market forces.
Then, if you add in trade deficits, which are basically symbolic for exporting standard of living to other economies, the value of your currency is lowered. These are also, at least partially, the result of government policy.
Few drilling permits allowed
Look at any crude spot price chart going back 5-10 years
They will claim they are granting more leases than ever
They don’t tell you they are refusing drill permits
Toss in printing notes pell mell on top of that
Why is there inflation?
Piss poor management of the government.
Biden and party give a bow.
The swamp is doing its best to impoverish and destroy the middle class. A lifetime of hard work and carefully planning our savings is gone in a couple of weeks/months when a loaf of bread costs $4,000. Just ask the Argentinians and Venezuelans.
“The leading cause of runaway inflation is government spending. “
The leading cause of runaway inflation is government printing money.
“In the first article EPA figures that 10 megabucks will change out 335 wood stoves. $29,850 to change out a wood stove?
In the second article Anchorage wants to float a 12,500,000.00 bond to put up 24 public restrooms. $520,833.33 for a modular restroom? “
Because they own interest in their Nephew’s company that contracts the product/service.
The bigger issue in the last couple of years is that we have an enormous mis-allocation of dollars due to ridiculous government mandates and massive spending on completely unproductive things.
Within the last 24 hours, GM announced that it was going to curtail the production of electric vehicles (EVs) and push back its EV sales goals to 2025. In the process of producing fewer EVs, the company is expecting save $1.5 billion.
Just think about that for a moment: "We'll save a lot of money by manufacturing (and selling) FEWER products."
There's clearly some serious mental retardation at work in government and the auto industry.
History has many examples of what happens when you get happy growing the supply of fiat currency beyond all reason.
The political class makes it worse by spending more than they take in, so the debt grows beyond all hope of paying it back. The only way to do anything is to devalue the currency, one way or another, so that you pay back "solid dollars" with "weakened dollars"; in other words, pay back the loans on a fraction of their original value.
Consider that, in terms of 1920 dollars, our current one-dollar currency is actually worth three cents, more or less.
Monetarists have somewhat imposed their definition of excessive money supply defining inflation. The too much money chasing . . . whatever.
Truth is . . . no one knows what causes inflation in a structural sense. There are 100s of examples of large money supply through out civilized history that did not raise prices.
Inflation happens when counterparties decide in their own minds that goods should have higher prices. That’s an unsatisfying cause, and it is not structural, but it’s the only one that is unquestionably true.
The price of oil in the US was $5 per barrel throughout World War II. Money supply varied wildly. Oil got scarce trying supply troops but that scarcity did not derive from price because oil production was setting records in those years. The price was $5. Government imposed. Whenever anyone talks about government price controls nowadays there is an instantaneous presumption that items will get scarce.
None of these presumptions are proven. There is no such thing as common sense when we are talking about a substance . . . money . . . created from nothingness by central banks based on the Board of Governors whimsy.
Then truthfully it will be easy for you to give us an exmaple.
Too few dollars chasing too many goods.
Bingo. Spending has nothing to do with it. It is simply supply and demand.
“Too many dollars chasing too few goods.”
Too often the government does harm on both fronts. On the one hand, they print too much money and extend too much credit. On the other hand, they over-regulate and mis-regulate the economy resulting in fewer goods.
The energy industry provides an example of Government’s role in the domestic production of goods. The price of energy is an important factor of production in manufacturing. When you push up the price of energy by going with expensive, unreliable energy (windmills, solar farms) while decreasing the production of cheaper, more reliable energy (coal, gas, nuclear) you raise the cost of manufacturing and that results in fewer domestically produced goods.
How about paying people (printing more money) to stay home and not work (reducing the supply of goods and services). Inflationary?
Here in Phoenix, every time government needs to spend money, they start re-working the pedestrian crossings to make them even more wheelchair friendly. I think they are in third round.
Each corner costs $100,000, and I have never seen anybody in wheelchair using them.
There are many corners like that, so the costs are astronomical. But, apparently, they do not need any approval, so this is “shovel ready” work!
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