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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.
LOL, so now you lump yourself in with the likes of Krugman?
Our economy is a train wreck, it is actually contracting after fiver years of Obama policies.
What the hell did adding $6 trillion to our fiscal debt buy us?? We have a fifty year high in poverty and people signing up for basic subsitance assistance thru Food Stamps have been accelerating by 200,000 to 300,000 per month, for five years.
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
What exactly do the working poor spend all their hard earned cash on, food, clothing, energy, and the government thinks we should not count them, so the poor are living in hard times but government says otherwise? Gee, i guess the poor are not spending more money on the basics necessities after all, so life is great.
He might live in Hawaii or Alaska. milk tends to be more expensive there. But lets look at some inflation.
100 years ago (well 101 now)
$1 was worth $23.01 today.
a dozen eggs:$.37 or $8.71 in todays dollars. (hmmm wth? is this right....)
Potatoes $.016 or $.47 in todays dollars.
Milk .356 per gallon.....or $8.24 per gallon today.
hmmm....Some research helps me find out WHY eggs were so much more expensive, turns out that things like refridgeration, and better production and distribution have dropped the price so much, same for milk. In fact, food as a % of income has dropped a LOT. Inflation is not insane on food like everyone claims....its a artificial view as we age that food prices are outrageous. Yeah they're higher then when I was a kid, but then again so is everyones income. I once paid $300/mo in rent too, same place is $650/mo today.....which is pretty much what you would expect on inflation alone
LOL, so now you lump yourself in with the likes of Krugman?
Our economy is a train wreck, it is actually contracting after fiver years of Obama policies.
What the hell did adding $6 trillion to our fiscal debt buy us?? We have a fifty year high in poverty and people signing up for basic subsitance assistance thru Food Stamps have been accelerating by 200,000 to 300,000 per month, for five years.
Its contracting based on what exactly? Can you back that up?
What exactly do the working poor spend all their hard earned cash on, food, clothing, energy, and the government thinks we should not count them, so the poor are living in hard times but government says otherwise? Gee, i guess the poor are not spending more money on the basics necessities after all, so life is great.
The CPI represents all goods and services purchased for consumption by the reference population (U or W) BLS has classified all expenditure items into more than 200 categories, arranged into eight major groups. Major groups and examples of categories in each are as follows:
FOOD AND BEVERAGES (breakfast cereal, milk, coffee, chicken, wine, full service meals, snacks)
HOUSING (rent of primary residence, owners' equivalent rent, fuel oil, bedroom furniture)
APPAREL (men's shirts and sweaters, women's dresses, jewelry)
TRANSPORTATION (new vehicles, airline fares, gasoline, motor vehicle insurance)
MEDICAL CARE (prescription drugs and medical supplies, physicians' services, eyeglasses and eye care, hospital services)
RECREATION (televisions, toys, pets and pet products, sports equipment, admissions);
EDUCATION AND COMMUNICATION (college tuition, postage, telephone services, computer software and accessories);
OTHER GOODS AND SERVICES (tobacco and smoking products, haircuts and other personal services, funeral expenses).
Without food and energy it is simply less volatile...
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.
Well....maybe the rules have been changed. In football, if you you advance the ball at least 10 yards you get 4 more down. Thus, you can predict that if you go at least 10 yards, the reaction should be a "first down". Thus, if one goes 12 yards, and they do not get a first down, then obviously the rules have been changed or someone is cheating.
Economics is not an exact science, with exact rules. It is more of a behavioral science. However, traditionally if the money supply expands faster than population, then the result would be inflation. That has traditionally been true when our economy was more closed. However, now the economy is more globalized and thus we export more of our inflation. Much of our money does not stay in our domestic economy long enough to produce the maximal inflationary effect......because the extra dollars ends up going oversees and gets deposited in the banks of other countries, increasing their money supply.
One of the big reasons that we debase our currency is so that we can export more goods. If our currency is low relative to other currencies, people with those currencies have greater purchasing power to buy our goods and hence we can sell more goods to other countries. That is how it works theoretically, however, other countries often, in turn, debase their currency because the dollar is the reserve currency of the world that sets the standard for all other currencies. Thus, they usually follow suit and peg their currency to the dollar like China does, instead of allowing it to "float". When they lower their currency too, they end up getting the inflation because they have more money coming in than going out of their economy, due to the trade imbalance the the US.
Thus, in short, inflation is resulting from our money expansion.....its just not taking place in the US as much. The question and consequence is how long are other countries going to put up with what the US is doing....by pushing inflation upon their economies in order to prop up the US economy? The thing is this. The us has the worlds economy by the balls due to the Dollar being the reserve currency of the world. That is the only reason that out behavior is not producing inflation at home, as predicted. The inflation is being absorbed by the world, because the dollars being created are spreading the world over...like Fukoshima radiation via the jet stream and ocean, instead of being concentrated in one area.
Last edited by Indentured Servant; 01-02-2014 at 04:00 PM..
Funny thing about China doing that however is that as a result they get inflation as well. And since they arent the world currency they actually get more inflation....which has turned into a issue for them.
As a result they've had larger wage inflation, and are becoming less competitive compared to some of their neighbors.
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.
First off, I did not say that debt causes inflation. I said that it doesn't. I don't believe that government debt directly causes inflation. But historically they tend to go together, because government can run up the debt, then deliberately create inflation by printing more money. Then the gov't gets to pay back its debt with dollars that are worth less than when the debt was incurred.
An analogy could be that gambling does not cause embezzlement, but the two often tend to be linked. Often an embezzler is someone with a gambling problem.
I doubt that private-sector debt would drive inflation. I guess it is possible that a private sector interest with large debt could lobby DC for inflationary policies, so that they could pay down their debt with cheaper dollars. It sounds far fetched and unlikely to me. It's also a good argument for keeping the Fed the way it is, largely out of the control of Congress.
Growth is actually the best it has been since 2007. I'm sorry but you are completely delusional and just plain wrong.
wow...did you just say growth has been the best since 07....meanwhile in 07 democrats were calling the same growth ANEMIC
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