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View Diary: Why what Ben Bernanke said yesterday should make you angry (102 comments)

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  •  Um, yes. (8+ / 0-)

    I'll take the Carter economy over the Hoover economy any day. And for the record inflation has always been considered well by progressives because it benefits debtors, who are more likely to be poor, and hurts creditors, who are more likely to be wealthy. It redistributes away from those sitting on huge piles of undeployed cash in favor of those earning income from economic activity.

    "It is, it seems, politically impossible to organize expenditure on the scale necessary to prove my case -- except in war conditions."--JM Keynes, 1940

    by randomfacts on Fri Jun 08, 2012 at 10:01:38 AM PDT

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    •  I agree, and to make an example I use this: (3+ / 0-)
      Recommended by:
      citydem, randomfacts, OkieLawyer

      If a person makes 1000 a month and has 500 in debt service, it's half their income. If deflation occurs and makes their income drop to 500, they have nothing left and they're toast. If inflation occurs and makes their income rise to 1500, then the 500 in debt becomes a smaller part of their total monthly expenditures. This is how Inflation can help the average person.

      This is also how I explain why I'm against getting rid of the Minimum Wage. With no MW, a company can reduce wages and that can mean you get a loss similar to deflation (which can result in actual deflation in the larger economy).

      Of course, some people want deflation... it makes the Gold Standard more do-able.

      -We need Healthcare Reform... but i'm selfish, I Need Healthcare reform-

      by JPax on Fri Jun 08, 2012 at 11:32:12 AM PDT

      [ Parent ]

      •  the problem is income isn't rising with inflation (0+ / 0-)

        so in your scenario, you still have 1000 to work with but all your expenses have gone up because of inflation.

        in some cases, many actually, their 1000 has gone down while inflation went up.  not good.

        -You want to change the system, run for office.

        by Deep Texan on Fri Jun 08, 2012 at 12:19:08 PM PDT

        [ Parent ]

      •  Do you have examples (1+ / 0-)
        Recommended by:
        greengemini

        in the last 12 years of where workers have seen their wages jump because of inflation? Inflation is there once one looks pass the BS CPI. How are public unions doing, what's left of them?

        How about retired people who planned to live off of savings. Kind of hard now with the long bond yield at 3.5%. They weren't looking for much. An extra $7G a year to supplement social security on a 100G or so in their IRAs they are too afraid to put in the stock market. Maybe an Extra 4G on the average 63G that are in all IRAs.

        Do you actually think that record Corporate debt wouldn't be paid down by the record cash on hand that they borrowed if interest rates went up? The only companies that would benefit are those with unencumbered free cash and they would definitely like to see interest rates go as would any saver of money.

        If interest rates were at 7% as they were in 2000, Apple alone would earn 10 Billion a year just on their cash hoard alone, allowing them to pay dividends without endangering cash.

        Other than Apple, Cash was damn hard to get in 2009 which is why companies show much cash in 2012. It's amazing how much this is repeated here without mentioning the corresponding debt that has been incurred to raise  cash to pay dividends, not to mention not knowing what percentage of it is off shore.

        Borrowing below 1% (is even better than selling stock) would be damn hard to get again if interest on debt hurt the manufactured earnings we see in the financial sector which has been falsifying financials with impunity since March of 2009.

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