(12-12-2021 07:46 PM)RiceLad15 Wrote:  

(12-12-2021 03:31 PM)tanqtonic Wrote:  

(12-12-2021 02:11 PM)InterestedX Wrote:  

(12-12-2021 01:39 PM)RiceLad15 Wrote:  

(12-12-2021 12:34 PM)OptimisticOwl Wrote:  When you stack the BBB on top of the infrastructure bill on top of the stimulus bills on top of ….

So I guess your point is that since the effects are not felt this moment, then we can just charge ahead blindly as though there will never be any effect? Very Democrat of you.

All the spending is inflationary, and it is massive. Defend that.

Going back to Klobuchar’s lies, they are about a bill not yet passed. It will be inflationary, and she lied when she said it would not be. Keep on point.

Just asking for details about why it is inflationary, since you called it a lie. Saying that’s a lie means you must have clear and obvious evidence for the bill being inflationary.

Plus, you said we’re seeing inflation from the infrastructure bill - so if you’re arguing for the infrastructure bill, then you should easily be able to point to what parts of that bill that have been enacted that have caused inflation.

It's simply not possible that our current inflation is caused by an imbalance in supply and demand due to the lingering effects of the pandemic, is it?

Part of it definitely. But we are currently exhibiting not pure inflation, but stagflation. Which cuts against that being a sole cause.

And one would assume by basic economics that when too much money chases goods, inflation occurs.

Pandemic probably affects the goods side, driving that down and prices up.

Too much money in the form of endless unemployment, no eviction rules, and multiple rounds of staggering levels of direct govt stimulus payments probably affects the ‘too much money’ side.

And by definition adding massive inputs of direct govt cash in the form of infrastructure programs and new welfare (both of which are in the infrastructure and BBB plan) add that much more to the pool of money chasing goods.

I don’t think you can simply wave it all off to pandemic effects on the amount of goods as you do, Interested.

And, embedded in there is why the infrastructure and BBB are (or will be) inherently additive to inflation per lad’s query.

Agree that the stimmies could have led to some inflation. But a few pieces of evidence against that (based on my understanding): other countries outside of the US have been experiencing similar inflation and we are continuing to see higher prices without stimmies or the actualization of any government spending (I don’t believe any cash has flowed into the economy from either major bill).

Its textbook basic economics that 'more cash chasing the same products' means more inflation. For you to argue 'could have led' is arguing against literally 120 years of economic theory.

The completed stimulus packages, simply by definition, *have* led to more inflation.

As to the just completed bill, there are literal effects almost immediately on credit and the banking system. But the wave of cash, you are correct, has not happened.

But, you can bet dollars to donuts that major firms *have* put the expected effect into works --- companies dont sit still knowing what has happened fiscally and will happen as an effect. One doesnt sit still on fee structures and current pricing knowing that added inflation will happen --- most pre-bake that into the cake, that is, they plan to get ahead of the curve and charge now for replacement later.

Not necessarily for an unpassed bill, and as to that you are correct.

But, the bipartisan bill absolutely will add to inflation --- even if it has not necessarily added much to it yet as to the above. But the only time one can argue that such a wall of monies will not make an effect is when enacted and implemented in a natural deflationary cycle --- that is when capital disappears. Like in 2008. That isnt the case presently.

As to the reconciliation, you will note the use by OO of the term 'will' -- that is a future effect (ostensibly conditional on it passing, if it does). And, no amount of econ can wash over that if it is passed, it will have such an inflationary effect. By definition.

Quote:For those who are arguing that either massive spending bill will lead to inflation - why do we not hear that same argument for any other massive spending bill or major tax cut? The product of both increases the amount of money in the economy (or so many republicans argue).

With massive spending bills it is always a factor -- it was a factor in the 2008 stimulus. And in that case, the enemy was a potentially massive deflationary shock --- that is the destruction of massive amounts of capital. The stimulus then was passed to 're-inflate' that spectre of a deflationary collapse.

And typically, spending bills have much more of an impact. Literally, money is created out of thin air and thrown out by a government. Very literally so. So you know the genesis of the US dollar? The fact is is that 'money' is created out of credit. Literally at the stroke of a keyboard.

In a bank loan, when you sign on the dotted line, the charter of the bank allows it to enter the 'lets go' into a keyboard, and almost magically the information is transmitted to the Fed. And the Fed then 'creates' the money for the loan.

Now, replace the person 'you' above with the Government. The government passes a net deficit spending bill of x billion dollars. That x billion dollars is created at the Fed and flopped over to the Government, who then hands them a series of Govt bonds to back that transfer. In a blink of an eye --- x billion dollars is created for the money supply.

And, that is what is happening here. In this case, between the two, about 5 trillion will be created and swarmed into the system. And that is why it is really hard to argue that no inflationary effect will be shown by the issue.

Quote:I actually do think we can link most, if not all, inflation to the pandemic and the issues in the supply chain and pent up demand. Along with stimmies, consumer spending shifted and often went down, leading to increases in demand for consumable goods. As the supply chain gets shocked, the supply is dropping because it is harder to move goods.

Plus, add in what I can assume is only a synergistic effect of everyone worrying about inflation, and this jacking up their prices, regardless of whether their industry is seeing increased costs, and whammy, inflation due to the pandemic.

Or, it could be inflation due to a bill that just passed and one that has yet to pass.

Well, look up how much went out in the stimulus and re-read my comments on the creation of money above.

Then think about how much effect the combined effect of the two bills will have.

I think you are overlooking some very basic issues.

I think that the supply chain issues actually very much is *some* cause of the very massive inflation we have now. In addition, the Fed is still in 'the taps are wide open' as to the Feds rate, *and* the floodgates are still wide open as to QE actions.

In addition to those, the stimuli that passed absolutely juiced the **** out of the already bloated money supply --- they added a lot more gas to the fire.

Now we are talking about doubling or tripling that burn pile fuel.

You seemingly think that will have zero or no effect. Most people who have a lot deeper understanding than you or I seemingly think the opposite.

Hopefully the background on the Fed, fiat money, and bill money that gets tacked on to the national debt will lend some foundation to your view. When you 'follow the money', I think there is only one clear outcome to the bills in question.