[Rhodes22-list] Economics - More Good News

[Brad Haslett]

Dave,

You are starting to bore me with your "there's a government boogieman"
approach to every issue.  I hated studying economics in undergrad and grad
school and I'll be damned if I'm going to teach it.  Have a nice day!

Brad

On 7/16/07, DCLewis1 at aol.com <DCLewis1 at aol.com> wrote:
>
>
> In a message dated 7/16/2007 6:21:34 A.M. Eastern Daylight Time,
> flybrad at gmail.com writes:
>
> The  prime result of 'printing' money is inflation.  Inflation is low.
> Show
> me the money!
>
> Brad
>
>
>
>
>
> Brad,
>
> Inflation is low?  The price of my house, and probably your
> house,  doubled
> in the last 6 years.  That's more than 12%/yr compounded  appreciation.  I
> believe housing is about 1/3 of the CPI, so if the price  of nothing else
> at all
> increased over the last 6 years you have minimum of  4% inflation per year
> -
> the Feds have been claiming 2.5% to 3% growth in the CPI  this year and
> less in
> earlier years.  But in addition we know the price of  gas has more than
> doubled in that time frame, again that's more than 12%/yr; gas  won't have
> nearly
> the same weighting in the CPI as housing, but it will  add.  And virtually
> every other component in the CPI will add as well,  except for underwear
> made in
> China.  There is absolutely no way inflation  is even roughly what the
> Feds are
> claiming.  They distinguish between  "core" inflation and "non-core"
> inflation, it's BS - from your and my  perspective there is only inflation
> and the
> number they report should have the  qualifier "would you believe?".  They
> tell
> you inflation is "contained" -  what in the world does that mean?  My
> guess
> is that inflation is at least  5%, maybe more - actually, in Greenspan's
> last
> years I think inflation  approached 10%, because of housing inflation.  If
> your income and the price  of all your goods and chattels have not
> increased
> dramatically over the past 6  years, you've fallen behind.
>
> Your government does very well when they under report inflation.   The
> leadership looks good.  At least as important as looking good, it  allows
> them to
> inflate out of the fiscal mess they have created.  Example:  income tax
> receipts
> are intrinsically indexed to inflation (unless the $ is  moving abroad),
> but
> by understating inflation they can provide a reduced COLA to  all those
> military and government pensions they have to fund - over time
> the  government will
> do all right, and the retirees will be impoverished.  It  works!  Example:
> if
> the gap between real inflation and the CPI were 2% to  3% (the Fed is
> currently reporting inflation of 2% to 3%, I claim it's at least  5%, the
> gap is 2% to
> 3%) the value of a military retirees pension would decrease  by 16% to 24%
> in
> constant dollars after 8 years.  The military retirement  system looks
> extremely generous, but the Feds have figured out how to inflate  the
> burden away.
> Of course people with private pensions have similar, and  generally worse,
> problems.
>
> Seriously, we need a independent organization that will track  inflation.
> The government has a massive vested interest in reporting low  numbers and
> it
> has been a lot less than straightforward with the American  people.  You
> can't
> believe their CPI numbers.  Don't believe me do  your own due diligence,
> dig
> out some medical bills, or gas receipts, check out  your home assessment,
> property tax, etc from 5 or 6 years ago, and compare  against your current
> costs, you
> 'll see that I'm not making this stuff up.
>
> One down side to reporting accurate inflation numbers might be that the
> general public would see how bad the situation really is and they might
> bail out
> of the US dollar.  That could really kill the economy.
>
> Ed's claim is the inflation is a result of competition from China and
> India
> for commodities, there is  measure of truth in that.  But it also  appears
> your government has been running it's printing presses
> overtime,  increasing the
> money supply - perhaps to help fund the war in Iraq etc and  still have a
> tax
> cut - that's a guaranteed way to generate inflation (and kill  the foreign
> exchange rate, which is being killed) - of course, if they tell
> you  there's no
> inflation, there's no inflation, right?.  Finally, we have  started to
> import
> inflation from China, India, etc - early on the impact of  China, India
> etc was
> deflationary (i.e. cheap goods) but now wages are going up  as those
> countries develop - wages are still cheap, but not as cheap - and
> we're  seeing that
> inflation as we import those goods and services.  I think this  last
> effect is
> particularly obvious in the Indian based software and software  support
> service sector.  Part of the "joy" associated with the development  of a
> complex
> global economy is that the US becomes vulnerable to events
> and  circumstances we
> can't control - importing inflation from India and  China is an example.
>
> As for giving the president line item veto authority - I once thought that
> would work, but Mr Bush is a case study showing it won't work.  If it's
> not  a
> faith based issue or about the war in Iraq there's no suggestion he'd veto
> anything.  I can't think of a single thing he's done to try to
> control  spending
> or balance the budget,  that's why he's called a  new-conservative.
>
> Finally, as for the US debt/GNP being no worse than France - I'm perplexed
> that you would make that comparison.  I never thought you'd hold up  the
> pseudo-Socialist government of France as a benchmark.   I remember  the
> day in my
> youth that the government of France declared bankruptcy.  We  should do
> better.
>
> Dave
>
>
>
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