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No but you can eat the savings of once big ticket items like TVs, Ipads and non apple laptops and use it to pay for slightly higher food costs. Or of course you can use cheaper substitute foods to replace higher price food items and not have an impact on your food spending.
For people where inflation is hurting them most, they were not buying TVs, iPads and laptops. Those items are not essential to living. They are more trying to buy rice and beans and pay rent.
I love that substitution line. You can only substitute so far, until you finally succumb to dumpster diving. When I had a lower income I was already buying those substituted foods, like $0.77 ground turkey in a tube and Hunts water thin pasta sauce. My one splurge was name brand jam (smuckers).
Note that I did not say that I can't afford the increase... I said costs are inflating far above 2%, different discussions. I am not willing to pay anything more than 20% of my take home pay on housing, most people in HCOL areas are willing to pay up to 50% which I think is absolutely foolish - but then again most people are also in debt so...
I see. I misunderstood. I think you are wise not to pay more than 20% of your take home pay on housing. I suspect it is very difficult to accomplish given the relative shortage of housing in LA.
Note that I did not say that I can't afford the increase... I said costs are inflating far above 2%, different discussions. I am not willing to pay anything more than 20% of my take home pay on housing, most people in HCOL areas are willing to pay up to 50% which I think is absolutely foolish - but then again most people are also in debt so...
They have their reasons for paying more. Location may be critical to their social life at that age, especially if they moved from another city. It may also be important to be close to the job to do well. They are also cutting out transportation expenses, such as a car ownership.
Things related to housing, such as a purchase, a major home repair, HOA fees, property taxes, and insurance, tend to be stable until change occurs. Then the many years of high rate of price increases is felt at once when you have to move, need to repaint the house, or to rehabilitate a part of the house. I was faced with nearly 140 thousand dollars in costs to rehabilitate a house belonging to my parents that hadn't had a major repair or paint job in twenty years.
College or primary school tuition, assisted living, and other major expenditures also fall into the same. Most people don't incur the expenses every year, but they need to be reflected in the cost index.
Unfortunately, inflation hits poor people the hardest. My home is paid for, so housing inflation means nothing to me. Gasoline prices are down, so I can drive around for less money than I did 15 years ago. I see people struggling to make rent, and feel sorry for them. I have more assets and can live far cheaper than they do.
I rent, just got my rent increase which is annual and it's 6% (Los Angeles area). Everywhere around I see prices rising more like 4-5%. Inflation is more like 5% going by anecdotal evidence. Yet, the government insists inflation is under 2% and now they are going to CUT interest rates, madness.
I rent, too, and mine will be going up 4%. I agree with your post. Saying 2% is a blatant lie. Even my food has gone up more than that.
Unfortunately, inflation hits poor people the hardest. My home is paid for, so housing inflation means nothing to me. Gasoline prices are down, so I can drive around for less money than I did 15 years ago. I see people struggling to make rent, and feel sorry for them. I have more assets and can live far cheaper than they do.
any rising costs will hurt the poor ...when you have no or little discretionary there is nothing to sub or cut back on .
AOC is an advocate of MMT. She has backed off basic income which was part of the MMT platform. So now, MMT primarily funds tax cuts and military spending. Welfare for some, but not for all.
Trump is essentially in favor of MMT if he is in the White House, against when he's not. That has been the Republican position.
Quote:
Originally Posted by Larry Caldwell
Unfortunately, inflation hits poor people the hardest. My home is paid for, so housing inflation means nothing to me. Gasoline prices are down, so I can drive around for less money than I did 15 years ago. I see people struggling to make rent, and feel sorry for them. I have more assets and can live far cheaper than they do.
Under 2 percent inflation equates to doubling of costs roughly every 40 years. Our real estate tax, HOA fees, and insurance alone cost 2x what it cost to rent a 3-bedroom apartment in this community 40 years ago. Rents have actually more than quadrupled over the same time in this area.
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