[Rhodes22-list] Economics - More Good News

[stan]

Brad,

I have not been as fortunate in having a chance to learn economics - that 
may be a disadvantage as to the "Why",  but I am not disadvantaged as to the 
facts:  The Inflation of the past 2 or 3 years has not been this bad since 
the Carter administration.

Thanks Ed, but I am busy and these breaks are just for comic relief.

ss

----- Original Message ----- 
From: "Brad Haslett" <flybrad at gmail.com>
To: "The Rhodes 22 mail list" <rhodes22-list at rhodes22.org>
Sent: Monday, July 16, 2007 5:13 PM
Subject: Re: [Rhodes22-list] Economics - More Good News


> 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
>>
>>
>>
>> ************************************** Get a sneak peak of the all-new 
>> AOL
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