Remember: Trump fired the head of BLS because he didn’t like the numbers in a jobs report. https://www.bbc.com/news/articles/cvg3xrrzdr0o
It covers changes over a 12-month period, says so right on the graphic. We know prices exploded over the past 5 years, we’re interested in seeing what inflation’s up to right now.
Firstly: Here’s the link to the chart. (US) Consumer Price Index https://www.bls.gov/cpi/
Secondly: I have a strong distrust of the current US government heads and will take this with a boatload of salt until factual evidence is provided and vetted.
Thirdly: This is showing the increase of inflation compared to the same point of time of last year, and not the cumulative inflation. Meaning the overall inflation that has been acumulated over the decades/century, leading to a percentage of less buying power per (US) dollar. So while the inflation rate might be 3%, that’s just looking at a short timeline and not the overall value the US dollar.
I found this webpage to be very informative. https://smartasset.com/investing/inflation-calculator
In my experience the only thing we buy regularly that hasn’t substantially increased in price in the last year is gasoline. Just about ever kind of food is substantially more, electricity has gone way up. Clothing prices are significantly more and as everyone who’s renting knows, rents have gone nuts. There is no way we’re spending 3% more than a year ago, it’s more like 8%.
Bottom line, I don’t believe anything that’s coming out of a Trump controlled agency is remotely accurate. He is already claiming prices are down by 300%-3,000%. I’m just waiting for him to say, “There’s no inflation if we don’t count the prices that have gone up.”
In my experience the only thing we buy regularly that hasn’t substantially increased in price in the last year is gasoline.
Not likely to last long, however. Gas prices in the US have been stabilized for a little while by tapping the strategic petroleum reserve.
Trump announced just a couple days ago that the government is planning to shift to replenishing the reserve, which means that the gas prices will soon be more directly dictated by market rates.
They prefer keeping us focused on these small incremental numbers like 3% increase .7% decrease, et cetera. So we don’t step back and see that since the year 2000, inflation has increased 97%.
That’s how compounding works. 97% over 25 years is about 2.75% per year.
And “inflation is good for the economy”
That claim is only controversial among people who don’t understand macroeconomics. Those are often the same people who think deflation is a good thing.
I mean, sure, it would be nice if housing prices were back at 2015 levels. Except the main way there is through another housing market or broader economic collapse.
A small amount of predictable inflation is good for the economy. You get to pay your car loan back with dollars that are smaller than the ones the bank fronted in the first place, and the bank has money to load at all because it makes sense for everyone in town to deposit their extra dollars rather than just hiding them at home.
It’d be nice to have some revaluing of physical currency though, since the spending power of a single dollar today is about what a nickel was a century ago. I wouldnt mind if tiny metal discs with Jefferson’s face said “one dollar”.
I would maybe argue that, when it comes to debt, sure inflation might be good, but only if inflation is higher than the interest rate. This is because the amount owed (initial plus interest) is decreasing in value due to inflation. However, if one doesn’t have debt (besides national debt, I suppose), then this argument is moot.
Devaluing a currency over time incentivizes it to be spent, which could be argued is a good thing, but there’s a problem. Human necessities exist on a market, so the money has to be spent, anyway, on things like food and housing. Devaluing currency faster than one can save it (inflation is greater than the interest rate given by banks) only serves to make it harder to make large purchases. One can buy their necessities, but struggles to save for a house because money not spent on necessities loses value too fast to be saved for a down payment. Pair this with wage stagnation, and we see that the difference between net income and necessities can become negative: income is no longer enough for necessities, and saving is impossible.
You seem to be blurring the line between “good for me” with “good for the economy”.
Why would a bank loan you money if you’re not paying enough in interest to offset the cost of inflation? Historically in such systems banks charge loan fees instead, and with those fees loans tend to be net-higher since capital seeks other investments, such as commodity trading (which tends to drive up the price for necessities, too!)
Bank loans for large purchases are, btw, very good things. If you are going to be not-spending $2000 a month for 20 years to buy yourself a home, it’s better for everyone if you can just live in said home while you do.
Please note that I’m NOT refuting your other points. Wage stagnation and income inequality are very bad things, and inflation does tend to exacerbate those things.
(We also haven’t talked about deflation,
devalueing currency doesnt incentivize money to be spent when you combine it with a shitload of speculation incentives (and various backroom deals, acting as socialism for the rich only) that turns your entire economy into a gambling den
it would not be ideal to think otherwise
I’m apparently living on another planet.
IRL you just learned Trump is a traitor who’s full of shit
🌎 👨🚀🔫👨🚀
*In the US.
There is only one Bureau of Labor Statistics in the world and it’s in the US.
Well, yes, my knowledge of this fact was what made it possible for me to deduce that the claim was about the US.
