Proposed Social Security Changes (physically, married, smart, children)
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There's an excellent article on the impact of the Chained CPI available here:
The article would be full of crap, except it's full of lies.
Quote:
Originally Posted by lenora
No need to shout, we heard you (and most of us ignored you) the first time.
Perhaps you heard, but you weren't listening.
Quote:
Originally Posted by lenora
It appears that regardless of political leaning, every poster except you understands the concept of inflation. Do you need someone to explain it to you? If yes, just ask and I'm sure one of us will be happy to explain it in simple terms.
S/he understands Inflation, it's people like you who don't. Since you're begging someone to explain it to you, I'll do the honors. It would appear RJ stands for 'Real Jackass' so I'll showed you how deceitful Richard Real Jackass (RJ) Eskow really is, and how little people (like him) understand Inflation.
There is no benefit cut, nor is Inflation a "tax."
The Laws of Economics are very real.....Inflation is merely once such aspect of those Laws.
The fatal flaw and fallacy in every argument about Inflation is the erroneous assumption Inflation should never exist.
The Laws of Economics say Inflation should exist, and therefore it does.
I'll prove it.
Cost Inflation: Prices are governed by the Law of Supply & Demand. When Supply remains constant and Demand increases, or Supply decreases and Demand remains constant or increases, then the price of that item rises.
Look at corn. You have had a continually low Supply of Corn, coupled with constant high Demand for Corn. That drives up the price of ethanol, which in turn drives up the price of gasoline, and then all foods that have corn in the system --- damn near all processed foods -- get hit with price rises.
This type of Cost Inflation is actually Demand-pull Inflation.
Who is responsible? You, because you are either over-consuming or under-producing.
Don't forget that corn is a global commodity. So, which is it --- over-consumption or under-production?
That depends on the exact circumstances. If corn production is maxed out, then you're over-consuming...which is exactly the case with corn in the US. You produce a sufficient amount of corn, but you consume corn for all the wrong reasons.
It was never intended to put corn in your gasoline tank or in your drinks and beverages.
How do you know? Because the Laws of Economics are driving up prices in an attempt to force and coerce you to use Resources as efficiently as possible.
Once again, for the hard of hearing, Economics is not about fairness or equality or any other lofty esoteric nonsense......the Laws of Economics are about harmony, balance, efficiency and stability.
When you violate the Laws of Economics, this is what happens.
Cost Inflation is designed to force consumers to reduce consumption. So the Laws of Economics have slapped you all in the face for being Stupid in a No-Stupid Zone, and quite frankly, I'm over the bleeding Moon about that.
Who does not see the logical fallacy in helping people over-consume or consume inefficiently?
The other facet of Cost-Inflation is Cost-push Inflation. That's caused by regulations --- uh, which many of you insist upon having ---- that drive up costs, which are reflected in prices.
Who does not see the hypocrisy of demanding regulation, but refusing to pay the costs?
Nothing is free --- some of you don't seem to understand that.
Interest Inflation......the prices of college tuition, housing, cars, boats, trucks, credit cards and everything else connected to interest rates are artificially inflated, due to government interference through attempts to regulated the markets or to artificially depress interest rates, plus the pool of credit is excessively large.
Wage Inflation...you won't see that in your life-time....if ever again.
Wage Inflation is caused by Demand exceeding a limited Supply of Workers of a certain Skill-Set. Last time you saw that was in the late 1960s and early 1970s as a deluge of technology (most of it related to transistors or computers) just fell onto the market.
Several things happen here....high Demand workers see their wages sky-rocket; workers in related fields see their wages also rise, albeit at a much slower pace; all other workers see their wages stagnate; rand then prices rise. That leaves a lot of workers high and dry, since their wages are flat or declining, and prices are rapidly rising.
Monetary Inflation (Real Inflation) is caused by excess currency chasing too few goods and services, which causes prices to rise.
When you have Monetary Inflation, the prices of everything rises, with everything meaning every thing, as in every single thing. Nothing escapes Monetary Inflation, not even wages and salaries.
It will be 12 more years before Monetary Inflation starts to create problems.
This…..
"Social Security doesn't contribute to the deficit, since it's funded separately. In fact, it's forbidden by law from contributing to the deficit."
…is a false statement. I’ll let the US Department of Treasury explain it to you…..
When the OASI and DI Trust Funds require redemption of these securities to make expenditures, the Government finances those expenditures out of accumulated cash balances, by raising taxes or other receipts, by borrowing from the public or repaying less debt, or by curtailing other expenditures.
Lots of really, really big words there, so I'm not surprised that Richard Real Jackass (RJ) Eskow doesn't understand them....but that's no excuse for you all not to understand.
So..........when one of you comes up with a theorem proving that Cost-push or Demand-pull Inflation should never occur.....let me know.....I'll help you write it up and then you and I will win the Nobel Prize in Economics and we will be rich beyond the wildest dreams of avarice and drink champagne and rub elbows with idiots like Krugman and Obama.
Yes, cost push and demand pull inflation are naturally occurring conditions and ones that threaten the very right of seniors to exist. What is the capacity of planet Earth and at what point does it reach the point where competition for resources exceeds our ability to produce and the real life application of life boat decisions begin. Perhaps the challenges to SS should be viewed through that prism at times.
Yes, cost push and demand pull inflation are naturally occurring conditions and ones that threaten the very right of seniors to exist. What is the capacity of planet Earth and at what point does it reach the point where competition for resources exceeds our ability to produce and the real life application of life boat decisions begin. Perhaps the challenges to SS should be viewed through that prism at times.
Not just seniors TuborgP; it threatens everyone at some point.
Those on fixed income/low income will feel it first.
Costs are rising faster than salaries so those other folks will feel it down the road.
...It was never intended to put corn in your gasoline tank or in your drinks and beverages...
I agree with just about 100% of your message - except perhaps the category of inflation that pushes up the price of corn. It's what you describe as "cost push inflation" IMO. Because the government mandates the use of ethanol in gas (which creates demand for corn). It also provides overly generous subsidies for domestic sugar producers (the primary ones are very wealthy) - which in turn pushes up the cost of sugar - which in turn causes manufacturers of many products to turn to corn fructose - which in turn pushes up the cost of corn.
That said - corn futures are down in recent months on the basis on increased corn planting this year (when things go up in price a lot - people will attempt to increase supply). Robyn
Not just seniors TuborgP; it threatens everyone at some point.
Those on fixed income/low income will feel it first.
Costs are rising faster than salaries so those other folks will feel it down the road.
The article would be full of crap, except it's full of lies.
You're the second person to express a negative opinion of the article I cited, and that's fine ... just as it was, and remains, my opinion that the article was excellent. In the absence of links to authoritative sources (not Fox News) that clearly refute the main points of the article, I'll continue to believe as stated in the article: "The chained CPI is the wrong answer to the wrong problem at the wrong time."
I found a recent C-SPAN video in which Stephen Goss, Chief Actuary for Social Security explains very clearly the effects of the different methods by which the benefit can be adjusted. At the following link, his segment is separately viewable, starts at about 03:07.
In describing the current modified price index method, he uses the example of substituting hamburger for steak. In the Chained-CPI method, he uses the example of purchasing a flat screen TV instead of the car that has doubled in price. I suppose a more realistic example would be juggling the purchase of items like food, meds and utilities.
I don't know who this fellow is - but he's a pretty dim bulb IMO if he thinks someone will buy a flat screen TV instead of a car assuming you need a car. Unless he reasons that without a car - you won't be able to go to work - that you'll start collecting unemployment - and that you'll sit home all day watching TV .
FWIW - as I mentioned above - meds and utilities are exempt from chained cpi adjustments (prices of those are in the inelastic category). People may actually behave the way you stated in real life - but that's not how the chained cpi is computed. Robyn
I agree with just about 100% of your message - except perhaps the category of inflation that pushes up the price of corn. It's what you describe as "cost push inflation" IMO. Because the government mandates the use of ethanol in gas (which creates demand for corn). It also provides overly generous subsidies for domestic sugar producers (the primary ones are very wealthy) - which in turn pushes up the cost of sugar - which in turn causes manufacturers of many products to turn to corn fructose - which in turn pushes up the cost of corn.
That said - corn futures are down in recent months on the basis on increased corn planting this year (when things go up in price a lot - people will attempt to increase supply). Robyn
I am trying to comment within the context of this thread. We have per your example put on the table government intervention in naturally occurring markets. If a person invest with TRowe Price thy get their monthly investor magazine. In their retirement issue of a few months ago they have an excellent article on the history of SS. It is written in the context of our going from an agrarian bases society to an industrial one. You can see the challenges of our post industrial society on senior care and the challenges of government dealing with it.
I don't know who this fellow is - but he's a pretty dim bulb IMO if he thinks someone will buy a flat screen TV instead of a car assuming you need a car. Unless he reasons that without a car - you won't be able to go to work - that you'll start collecting unemployment - and that you'll sit home all day watching TV .
FWIW - as I mentioned above - meds and utilities are exempt from chained cpi adjustments (prices of those are in the inelastic category). People may actually behave the way you stated in real life - but that's not how the chained cpi is computed. Robyn
The assumption is that instead of buying a new car you will keep the old one and use additional revenues for the lower priced tv. New car sales down and flat screens up. If you remember the link I posted in another thread about consumer spending you see the implications of inflation on each quartile as seen through the eyes of a data cruncher. There are differences in spending patterns between quartile and if inflation causes you to fall behind the assumption is that your spending will move towards the norm of either a lower quartile or a lower rung of your current quartile. I mentioned in the thread the applicability of the data to CPI and hopefully folks can see why now.
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