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True, it can happen that way. Debt does not directly cause inflation. But historically, debt and inflation tend to be linked, because it is hard for rulers to resist the temptation to pay off debt with cheaper currency, not to mention gaining of tax revenue through 'bracket creep.'
in our country, private-sector debt drives inflation, which drives public-sector debt.
suggesting the deficit causes inflation is fine in theory, but in practice it is the tail wagging the dog. The private sector markets are far, far larger than the u.s. government, its tax base, and its spending.
that is what laffer (and a lot of conservatives) just fundamentally don't get.
He pretty much got everything completely wrong. No sky rocketing interest rates, no run away inflation, no need to dig a hole in the backyard to bury your gold.
The reason he failed, when so many others (me, Krugman, Stiglitz, Reich, etc.) did not, is that he does not believe in context. In his view, deficits are always bad, will always drive up interest rates, and if combined with increasing spending, will always push inflation. All of this can happen, but not when demand is depressed. So Laffer forgot that there is a demand curve, and therefore completely misunderstood the economics of the 2008/09 crisis.
Screw him and the idiots who used his ignorant foolishness to justify standing in the way of what needed to be done.
Right. NOW you are claiming to be smarter then Laffer. THAT, is a laugh!
Just about anyone who is ever right about anything is smarter than Laffer. The guy has a panache for making wild and spectacularly wrong claims. He does it over, and over, and over again.
You'd think after their idol posted such dead wrong, completely opposite from reality forecasts, with such frequency of failure, they might start to look elsewhere for enlightenment. Sadly, the right wing never learns though and instead they always prefer to be told what they want to hear rather than reality.
I recall reading this doom and gloom bs when it was first published in June, '09.
He got it exactly right!
Flooding the market with fiat currency has caused every aspect of life to be more expensive.
Why do you think the government excludes staples (food, clothing, energy...etc.) from core inflation?
It's nothing more than creative accounting to make us feel warm and fuzzy, while in reality we are paying 10-20-30% more to live.
In 2009 I paid $1.80 for a gallon of gas, my energy bill 25% less per kW, my grocery bill was 40% less, and clothing was much cheaper.
Laffer got it right, but you believe there's no inflation because the government tells you so.
Why do Keynesians suffer from terminal tunnel vision?
Quote:
Originally Posted by le roi
in our country, private-sector debt drives inflation, which drives public-sector debt.
suggesting the deficit causes inflation is fine in theory, but in practice it is the tail wagging the dog. The private sector markets are far, far larger than the u.s. government, its tax base, and its spending.
that is what laffer (and a lot of conservatives) just fundamentally don't get.
you better go to the store and readjust your numbers
inflation has been near 15% for the last 3 years
look at the prices in the stores
have you benn to the store
prices are going up, and up
coffee is double what it was just 5 years ago in 2008
coffee up
sugar up
cotton up
corn up
all other vegitable up
all meats up
almost everything us up
REAL INFALTION IS CURRENTLY ABOUT 10-15% or more...unfortuantely the government(from either party) doesnt give us the REAL numbers
it certainly is for every working class person or old person
you think that your utility cost being up is not inlation???
you think your medical/pharm costs being up is not inflation???
you think your clothing costs being up is not inflation???
you think your housing (rent and rela taxes) being up is not inflation???
you think food costs going up is not inflation???
you think building supply costs (ie home depot) being UP is not inflation???
almost EVERYTHING we use has gone up by at least 10% to in some cases 30% in the last 3 years...and you are going to tell me inflation is "only 2% or less"
have you been to the store???...have you SEEN THE PRICES???? milk is nearly $4 a gallon...meats have gone though the roof...in 2004 a 3lb can of coffee was about $3...today its a 2.2lb can of coffee and its $10...over a 300% increase in less than 10 years
sorry you are too blind to see
you certainly do prove that the sheeple are out there for the slaughter
so are you going to tell me YOU BELIEVE the government TELLING YOU that inflation is at 0-3% when PRICES in nearly everything have risen 10-20% or more????
the 'inflation rate' is not REAL INFLATION (ie COST inflation) that real americans (and seniors) feel with almost everything we buy
costs are going up on almost everything..especially food (which is NOT counted in the 'inflation rate')
Junk fish called Tauplia which was selling in 2008 for 1.28 a pound is now close to 5.00 a pound...Catfish that averaged between 3.49 and 3.99 at 6.00 plus.... Not just one store, they are all similar in price. Paper towels are highway robbery.....deli ham/turkey which I used to get for 2-4 a pound...now 6-9 a pound
last Thanksgiving,,Sweet potatoes they were 49 cent/pound...now $1.79/pound
breyers icecream HALF GALLON, was (2008) 2for 5...now its 1.5 quarts and its 4/each
Even cooking oil 48 fl oz... went from $2.99 (reg. p about 6 months ago) to $3.69 (sale)... from $4.29 (reg. price).
Anything made of metal is the nth power more expensive now.
Flooding the market with fiat currency has caused every aspect of life to be more expensive.
Why do you think the government excludes staples (food, clothing, energy...etc.) from core inflation?
It's nothing more than creative accounting to make us feel warm and fuzzy, while in reality we are paying 10-20-30% more to live.
In 2009 I paid $1.80 for a gallon of gas, my energy bill 25% less per kW, my grocery bill was 40% less, and clothing was much cheaper.
Laffer got it right, but you believe there's no inflation because the government tells you so.
Why do Keynesians suffer from terminal tunnel vision?
Like you
Your memory is defective. There is a notch in the 2009 period but the actually cost of gasoline got to 3.00 a gallon in 2008. Bounced around some but is presently well below 2012 or 1H2013 prices. Actually doing pretty well on any of the petroleum related products. Inflation adjusted gas prices peaked in 1981 and again in 2011. Well down now from that peak.
you better go to the store and readjust your numbers
inflation has been near 15% for the last 3 years
look at the prices in the stores
have you benn to the store
prices are going up, and up . . .
YOU need to find a different store to shop at.
Milk is nowhere near $4 a gallon.
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