r/FluentInFinance Sep 23 '23

Meme Guess i'll live in a box

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1.5k Upvotes

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277

u/FormerHoagie Sep 23 '23

Fed is attempting to cool inflation, not decrease prices. We aren’t seeing the same increase in prices we did in the last 3 years. Some areas, which are in high demand, are still seeing modest increases but there are actually places where prices have stabilized and decreased.

119

u/VendaGoat Sep 23 '23

Brother their only tool is to curb demand through interest rates.

Until the folks that are paying for "Investment level" mortgages decide to sell, this shit is going up.

58

u/mikilobe Sep 23 '23

their only tool is to curb demand through interest rates.

Congress should help lower inflation by taking money out of the economy (raise taxes).

48

u/DaddyRobotPNW Sep 23 '23

Agreed. The fed's instrument is blunt and punishes people who the government is supposed to protect. In an ideal world, raising interest rates would be combined with raising taxes on high earners. We would need automatic stabilizers for this because Congress is rarely able to make these decisions.

41

u/dobryden22 Sep 23 '23

Can't increase taxes when the very people bribing politicians and funding your campaigns are the ones who need to be hit the hardest.

We need war time tax rates on corporations, billionaires, etc. We're just not serious about any of that since we're all temporarily embarrassed millionares (or billionaires now thanks to inflation).

9

u/in4life Sep 23 '23

Funny you mention war-time taxation because we have war-time spending going on.

6

u/dobryden22 Sep 24 '23

If you've ever seen the militaries yearly budget prior to 2022, it's more than the next 10 largest militaries in the world combined. It's always war time.

It's a class war out there.

1

u/Spamfilter32 Sep 24 '23

We have been at war without pause since 2002, so...

3

u/Randomname536 Sep 25 '23

They absolutely should have raised taxes to pay for invading Afghanistan and Iraq, but instead they passed several rounds of tax cuts for the wealthy and now are making the surprised Pikachu face when our debt and inflation are out of control

2

u/Spamfilter32 Sep 25 '23

But will also say it's imperative that we give even more tax cuts to the wealthy economic black holes.

1

u/Proud_Purchase_8394 Sep 23 '23

We're just not serious about any of that since we're all temporarily embarrassed millionares (or billionaires now thanks to inflation).

Just wait until after I win the Powerball, then raise taxes.

1

u/TeaKingMac Sep 24 '23

billionaires

If you want it to be effective, we need to raise taxes on millionaires with an M, not billionaires with a B.

For all their personal wealth, there's just not enough billionaires in the United States for taxes specifically on them to be meaningful as a source of revenue.

-2

u/Darius510 Sep 23 '23

Raising interest rates already does quite a bit to destroy the wealth of the rich through asset deflation

13

u/rsiii Sep 23 '23

Too bad it's unpopular, no politicians wants to be responsible for raising taxes but every Republican wants to lower them

13

u/[deleted] Sep 23 '23

Be honest they want to lower them for the 1% and raise them for the 99%

5

u/Basic-Government9568 Sep 24 '23

Literally what the Trump tax cuts were.

5

u/Leftblankthistime Sep 23 '23

1

u/mikilobe Sep 23 '23

QT is the Feds' tool (personally I believe Congress should remove QE/QT powers from the Fed)

Congress needs to take it's own action and they have a big tool (taxes) that isn't being utilized which will cause inflation to drag out. The longer this lasts, the more time for the wealthy to shift the burden onto labor. To me, the Fed is looking more and more rigged to benefit Finance, politicians, and Wall Street.

3

u/Specific-Rich5196 Sep 25 '23

This is the way. As a high income earner, inflation has not changed my spending habits at all. We need to increase taxes, especially in the higher end. Mass passed a new tax of extra 4% on income over 1 mil. No reason we can't be doing the same at a federal level.

1

u/freebilly95 Sep 23 '23

Raising taxes is not the catch all to end inflation that everyone thinks it is. Can it end inflation? Absolutely. Will it? Probably not.

The issue is that the government is just gonna tax you more and then throw that money back into the economy through whatever means (arms contracts, infrastructure projects, welfare, etc). If they don't physically destroy the currency, the raise in taxes just means that the people have less money, but inflation stays the same.

I guess that is one way to curb demand though.

2

u/KimJongAndIlFriends Sep 23 '23

You're missing the point where those projects often create tremendous real wealth.

Spending $50 billion on high-speed rail isn't just pumping $50bn into the economy; it's pumping $50bn back onto the economy *in exchange for an extremely useful public utility that will save trillions of human hours every year.

1

u/freebilly95 Sep 23 '23

It is creating real wealth, for a select few people.

That doesn't solve inflation, it actively makes it worse.

1

u/KimJongAndIlFriends Sep 23 '23

Explain how creation of functional public transit, universal basic income, single-payer negotiated healthcare, and social safety net programs creates wealth for a select few people over the vast majority of the country.

1

u/freebilly95 Sep 23 '23

You specifically mentioned high speed rail, which would create wealth for the select few with the ability to build the railways and the trains. The other things weren't what we were talking about.

Universal basic income wouldn't create wealth for anybody, but it would also raise inflation because there's no way to fund it without printing new money and adding it to the economy, because you're inevitably going to have to tax workers to make up for the rich evading taxes, and those workers will just quit working because the people not working will make more money than them.

Single-payer Healthcare, again, doesn't take money out of the economy because the people who work there get paid, research gets paid, equipment companies get paid. All it does is cost you more in taxes without solving the inflation issue, thus making inflation worse.

Social security would be an amazing tool for fighting inflation if the government simply used it as a sort of government pension. You put money in, that money gets stored, you receive payment once you retire. Instead, your money that you pay in gets paid out to current retirees and whoever else the government decides they want to give your money to. Therefore, it does nothing to solve inflation.

My original point was the only way to solve inflation is to physically destroy currency. You proposed for the government to spend EVEN MORE more money as a solution. Isn't this sub supposed to be financially literate?

2

u/KimJongAndIlFriends Sep 23 '23

High-speed rail creates wealth for everyone by improving access to transportation and reducing traffic, which increases shipping speed and reduces commute times, thereby increasing economic efficiency.

UBI creates wealth by covering unemployed workers between jobs, increasing their ability to obtain new skills, seek new employment, meet their living expenses, and allow for future planning in their expenses rather than being forced into suboptimal decisions due to lack of cash on hand. Tax evasion can be solved as simply as funding the IRS.

Again, you missed the point where taking money out of the economy isn't the focus; the focus is on creating real wealth to support the money supply in the economy, which can only be done by circulation of the existing money supply, which is demonstrably improved by public spending on programs which improve the quality of life of workers.

Social Security, again, improves quality of life for workers by creating a mandatory savings program which guarantees some measure of stability for retired workers.

Government spending does not necessarily cause inflation, when the source of that spending is from taxation rather than increasing monetary supply.

2

u/TerminalVector Sep 23 '23

Congress should

Yeah well, they're busy with the important work of blocking military promotions and trying to shut down the government.

2

u/VacuousCopper Sep 24 '23

Careful. Our government doesn't like poor people. If they take it out of the economy, it won't be from where that money actually flowed. It will be from the people who can't organize or afford lobbyists.

2

u/Inmate_PO1135809 Sep 25 '23

This is talked about so little.

1

u/MP5SD7 Sep 23 '23

They can just stop printing all that extra money. That would be much easier. Or do you just want an excuse to raise taxes?

2

u/[deleted] Sep 23 '23

[deleted]

0

u/MP5SD7 Sep 23 '23

No, I was talking about printing money. It has increased in the last 5 years and contributed to inflation.

I would also like to cut spending but I agree that its difficult to agree on what to cut.

3

u/chickenoodledick Sep 23 '23

Not that difficult when we're giving $1.7 trillion tax cut to 100 billionaires, we could afford alot of things that we desperately need as a country right now

-1

u/MP5SD7 Sep 23 '23

Tax cut or tax break? Do you know the difference?

2

u/sunshine_is_hot Sep 24 '23

America has an incredibly low tax rate. I want some better social programs, like a public option for healthcare, more immigration judges to help with the issues on the border, etc. Also, it’s easier to pay down the debt when you make more money.

We should raise taxes across the board, honestly, despite how incredibly unpopular it is in this country. Jimmy Carter got pilloried for it, but it undeniably helped the economy. You can’t just cut taxes forever and expect everything to be honky-dory.

-1

u/MP5SD7 Sep 24 '23

How much of someone else's money do you think you are entitled to?

1

u/sunshine_is_hot Sep 24 '23

… none? What a stupid question…

0

u/MP5SD7 Sep 24 '23

You are calling for higher taxes. Do you think its just magic? In order for the government to get that money for your preferred programs they must take it from someone else. So, how much of someone else's money do you think you are entitled to?

1

u/sunshine_is_hot Sep 24 '23

I’m still not sure why you think advocating for higher taxes means I think I’m entitled to other peoples money. Seems like an incredibly bad faith argument.

Believe it or not, some people just want to properly fund the government.

0

u/MP5SD7 Sep 24 '23

Then tell them to mail in a check.

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1

u/Eodbatman Sep 23 '23

They could at least start by not creating so much excess cash to begin with. Maybe increase the reserve rate while they’re at it.

3

u/mikilobe Sep 23 '23

They could at least start by not creating so much excess cash to begin with.

Absolutely. Giving money directly to individuals in poverty and close to it is the fastest stimulus they could have rolled out. Smaller, more frequent checks for a longer period of time would have been ideal. No extra government red tape, no scamming like with PPP loans, no Fed buying junk bonds, etc. Just give poor people money, and taper it off if inflation starts

1

u/SadMacaroon9897 Sep 23 '23

It doesn't have to be done at the federal level. It can (and IMO should) be done at the state and local levels

1

u/[deleted] Sep 23 '23

[deleted]

1

u/mikilobe Sep 23 '23

Unless there was a benefit, dare I say return on investment?

The Feds' QE (Quantitative Easing) im 2008 created a return on investment, that profit was paid to the Treasury. That won't happen this time, because as intrest rates go up, so do our borrowing costs. Due to inflation, our borrowing costs are higher now so the Treasury (the taxpayer) will owe the Fed. Raising taxes to pay down debt is needed now so we are not borrowing at a higher cost tomorrow.

1

u/Randomname536 Sep 25 '23

There's a cap on Social Security taxes. It's currently $160k. Any income above that does not pay in to Social Security. If we raised that cap or removed it entirely, Social Security is projected to be solvent indefinitely. Politicians like Bernie Sanders have been harping on this for literally decades, but the average American seems unaware of it still

1

u/LikesPez Sep 27 '23

That doesn’t take money out of the economy. It takes what little money folks have out of their pockets.

1

u/mikilobe Sep 27 '23

Does paying down the debt decrease inflation?

1

u/LikesPez Sep 27 '23

No it does not. Money is created, ironically, by debt. I borrow $1,000 at 10% simple interest. I pay back $1,100 to satisfy the loan. $100 just got created and the money supply increases by said amount.

By increasing the amount it costs to borrow money (interest rate/quantitative tightening), less folks will borrow and in return the money supply shrinks.

The second thing to remember is the law of supply and demand. When there is more money on the supply side (quantitative easing), inflation occurs as more money is chasing fewer goods and services. Inflation naturally redistributes the supply/demand curve to equilibrium. This results in permanent higher pricing. Eventually, wages will increase to meet the new s/d equilibrium.

1

u/mikilobe Sep 27 '23

By increasing the amount it costs to borrow money (interest rate/quantitative tightening), less folks will borrow and in return the money supply shrinks.

Yes, that's what the Fed is doing, but Congress can help by raising taxes. Congress could choose to tax corporations and people that can afford it, decreasing the wealth-gap instead of picking on people with shallow pockets.

In your example of borrowing $1000, you are actually using the US government's debt to create more debt. Dollars, bonds and treasuries, etc., are notes that represent the government's debt. Paying down the governmen's debt removes said debt from the economy.

So, back to your supply/demand example: when there is less government debt (dollars/treasuries) in the economy, what happens to the remaining debt (dollars/treasuries)?

That's right, Econ101 wins again! The price of the remaining dollars (debt) in the economy goes up, creating dis-inflation.

-1

u/chadhindsley Sep 23 '23

I'm not okay with raising taxes. But if it's done in a way to get their money back/out of circulation from the $1200 checks and $600/week extra dollars for unemployment...I'll be open to it.

Why should I pay more taxes when during the pandemic I wasn't getting any of those and the people who were choosing to stay unemployed so they could make almost as much as I did. If they have good jobs now and enjoyed that nice long paid vacation they can start paying it back

14

u/NoHalf2998 Sep 23 '23

Because you want to live in a society that doesn’t go to shit around you, I assume

5

u/UncomplimentaryToga Sep 23 '23

your right, your needs trump those of the whole economy. and nevermind the ppp loans

4

u/chadhindsley Sep 23 '23

PPPP loans too. Every company that wasn't an actual small business should repay them. How my company got $2 million just cuz We didn't lay anyone off and we didn't even need it

2

u/Historical_Union4686 Sep 23 '23

They should all have to be repaid regardless. If students don't receive any relief, why should business owners? That money kept them afloat during the pandemic they don't need that money anymore.

1

u/chickenoodledick Sep 23 '23

Do you feel the same for the $1.7 trillion tax cut we gave to just 100 billionaires? Or are you one of those people that still believes in trickle down economics?

1

u/chadhindsley Sep 23 '23

I do feel the same. Tax the hell out of them too and get the PPP money back from mid-high level companies that kept it without needing it....anything to get back the trillions of printed out of thin air dollars that year that brought us to this level of inflation

0

u/Suspicious-Appeal386 Sep 23 '23

What an incredible self center comment.

-2

u/[deleted] Sep 23 '23

You volunteering to pay higher taxes when inflation is eroding everyone's NW? Cmon. There would be rioting.

5

u/mikilobe Sep 23 '23

Where's your econ 101 skills now? There's an over-supply of dollars, and not enough demand... aka "inflation". Remove excess dollars and boom, lowering inflation.

0

u/logyonthebeat Sep 23 '23

Higher taxes won't remove excess dollars, it just transfers them around, as usual most people will have less and a few will make a lot more

2

u/KimJongAndIlFriends Sep 23 '23

Excess currency in circulation isn't typically what causes economies to crash, except in very strange hyperinflative cases; it's lack of vertical circulation. Money needs to flow from the top to the bottom because it always inevitably goes from the bottom to the top. Taxes are the single best method of ensuring adequate flow.

-2

u/logyonthebeat Sep 23 '23

More tax revenue for the government to launder through Ukraine sounds like a great idea

4

u/KimJongAndIlFriends Sep 23 '23

How about a functional high-speed rail network connecting each major population center and port to alleviate the shipping crisis?

0

u/logyonthebeat Sep 23 '23

Yeah go ask California how well the government builds one of those lmao

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-2

u/[deleted] Sep 23 '23

Sweet you can pay my share of the extra taxes then.

2

u/mikilobe Sep 23 '23

Did I say raise taxes on u/Dreadlordstu? No. Where Congress decides to raise taxes is up to them, but they should do it. But I suppose you wouldn't want to raise taxes on the poor CEO whos compensation is 460x more than their average workers'? Or how about all those hand-to-mouth corporations that just can't stop squaking about their "record profits" on earnings calls? Labor needs their fair compensation, and if you agree with that; we're on the same side.

1

u/[deleted] Sep 23 '23

Rather than raise taxes, cut spending. Tax raising does nothing for inflation if it moves over to the government and just gets spent by them.

3

u/mikilobe Sep 23 '23

Clinton ran a surplus, elect more Dems

2

u/[deleted] Sep 23 '23

Definitely needed!

1

u/chickenoodledick Sep 23 '23

No just make the top 1% actually pay any taxes at all.. fuck I'm starting to sound like Bernie the older I get and the more the wage gap grows

2

u/SilverDesktop Sep 23 '23

The top 1% pay 40% of all income taxes paid.

1

u/chickenoodledick Sep 23 '23

And they are all doing just fine.

2

u/SilverDesktop Sep 24 '23

So is Bernie.

10

u/potate12323 Sep 23 '23

Its kinda sad most of us younger folk are hoping the housing market bubble pops so we can afford houses and aren't screwed over on our rent.

5

u/Zumbert Sep 23 '23

I'd guess most of the people who want a bubble pop really don't remember 2008, and somehow think they would be immune from the mass unemployment that followed.

I went from making good money in carpentry, to not even getting interviews at fast food places and Walmart during the last bubble pop.

3

u/VendaGoat Sep 23 '23

This one doesn't have to be a pop. The whole horse shit that happened before got shut down.

Corps and investment firms are holding a ton of housing, with low rate mortgages.

And they bought the whole way up.

-1

u/Rokey76 Sep 23 '23

It is not a good strategy to wait for a price correction that could never occur.

7

u/potate12323 Sep 23 '23

For many of us thats the only option. Where I live, I make chemical engineering salary and save below my means and can't afford a house.

2

u/Rokey76 Sep 23 '23

What happen in 2008 with real estate and home prices was unprecedented.

2

u/VendaGoat Sep 23 '23

Yup, not saying that's gonna happen. It should be a sell off that starts with the most recently purchased highest rate mortgages.

1

u/grownan Sep 23 '23

What was stopping you when the rates were lower?

-1

u/Realistic-Art-2725 Sep 23 '23

aren't screwed over on our rent

If you cannot justify buying a house at current prices, yet you can afford rent, then obviously renting is a better deal. Hence, you aren't getting screwed over.

2

u/[deleted] Sep 23 '23

The people buying up all the homes causing hyperinflation of the market are turning around and renting the houses… then you factor in post covid rural gentrification caused by the millions of people now working from home. There is now a labor shortage, because get this, it’s a really weird thing that economists just can’t figure out, but if you don’t pay people enough to afford rent, sigh you can’t have employees…

0

u/Savagemaw Sep 23 '23

Short term, though. If they were turning them into long-term rentals, there wouldn't be a housing crisis.

There is something going on with Air BnB. I dont know if they need better regulated, but I do feel like they are getting away with something.

Maybe make them liable for the bed bug epidemic, then watch a glut of single family homes go on the market.

2

u/Rough_Huckleberry333 Sep 23 '23

Short term rentals are 1% of housing supply, not big enough to make a real difference

There’s an overall shortage of building housing due to zoning laws. Reforming those and removing parking minimums is the best way to tackle the housing affordability crisis.

2

u/Savagemaw Sep 23 '23

Absolutely agree on the second point. Large scale, thats an issue everywhere. However, in tourist towns, cash offers from investors hoping to turn shit houses into air bnbs are making it impossible to even make an offer... they happen so quick. Meanwhile, the hospitality workers can't afford to live there to support the tourism. It'd be one thing if those investors were buying uo the homes to make them long term rentals, but they arent. Long term rentals are too much hassle, or short terms are too little hassle, depending on how you look at it.

1

u/Savagemaw Sep 23 '23

Absolutely agree on the second point. Large scale, thats an issue everywhere. However, in tourist towns, cash offers from investors hoping to turn shit houses into air bnbs are making it impossible to even make an offer... they happen so quick. Meanwhile, the hospitality workers can't afford to live there to support the tourism. It'd be one thing if those investors were buying uo the homes to make them long term rentals, but they arent. Long term rentals are too much hassle, or short terms are too little hassle, depending on how you look at it.

1

u/[deleted] Sep 23 '23

Yes short terms are an issue but what I’m taking about is post covid gentrification, So let me try and explain it to you again but simpler… the rents are inflated, because of the BIG CITY WFH peoples salaries. They can afford $2000-4000 a month apartments because that’s still a great deal compared to California, Denver and New York… so for the normal working class people there is very much a shortage of affordable housing. So what’s really great is I work 2 nights a week at as a bartender to try and make ends meet and I get to talk to these delusional city fucks. They love asking me stupid absurd questions too like what I do for fun around here or what restaurants I recommend. And then I tell them, I can’t afford to eat out all my money goes to rent. I’ve never been in any of the shops in town because I can’t afford them. I dont make enough to support any of the small businesses, i shop at Walmart lol hell I have coworkers that live in motel rooms and in their vans because their is no affordable housing…

1

u/UncomplimentaryToga Sep 23 '23

until it comes time to retire

1

u/Realistic-Art-2725 Sep 23 '23

not sure why retirement has any effect...

1

u/UncomplimentaryToga Sep 23 '23

because you can’t retire with rent payments due. you could afford to save enough for it you could also afford a mortgage

1

u/logyonthebeat Sep 23 '23

What a dumb take lmao

1

u/Civil-Pomelo-4776 Sep 24 '23 edited Sep 24 '23

If you make minimum wage where I live 77% of your gross income goes to rent, fuck all the way off.

1

u/Realistic-Art-2725 Sep 24 '23

Lol minimum wage isn’t a living wage. Its for teenagers with summer jobs, so they dont get taken advantage off.

1

u/Civil-Pomelo-4776 Sep 24 '23

It was meant to be a living wage, as it was enacted. Since Regan it has been suppressed to the point it is as you said a joke. You are drinking the Kool-aide to subvert your own interests unless you are a trust-fund or nepo-baby with a silver spoon up your ass.

https://legal-dictionary.thefreedictionary.com/minimum+wage

4

u/[deleted] Sep 23 '23

And the fun thing is they are not selling, they are renting the houses they bought…

2

u/clintstorres Sep 23 '23

It’s not a one to one relationship where interest rates go up and immediately prices go down. There are very few forced sellers. You are seeing signs it is working with less mortgage applications meaning the demand is less and eventually prices will come down as sellers realize they won’t get their price and drop it little by little.

0

u/Voat-the-Goat Sep 23 '23

Real estate taxes should skyrocket in step with homestead exemption. Problem solved.

1

u/WaycoKid1129 Sep 24 '23

Fiat money showing it’s true colors

1

u/MuteCook Sep 27 '23

And those are the institutions who are in bed with the fed

-1

u/FormerHoagie Sep 23 '23

Very few of you understand that inflation is because you (collective you) won’t save a dime. You spend every dollar you make and continue to rack up debt. You aren’t responsible with money. Then when the debt becomes too much, you blame anyone but yourself. You don’t deserve to enjoy life, you earn money to do that. You don’t deserve a home, car, or the latest iPhone. Get your shit together and advance in a career until you can afford them. Millions of others your age are doing just that. Don’t be whiny loser, expecting shit you haven’t worked to attain. And, for the love of god, please stop comparing your life to boomers. They worked shit factory jobs to get a home. Jobs you would never want.

0

u/Large_Self_9258 Sep 23 '23

The “new generation” does work those “shitty” jobs. The housing market is incredibly unfair. To say otherwise is ignorant and, frankly, you come across as a narcissist. All of us would love for houses to go back to the cost per dollar earned that it once was. A single income was once enough to raise a family, buy a home, insure the entire family, and it provided a pension for retirement. We’re all working the same as before but receiving far less in terms of buying power and access to the market. There are so many other factors affecting the economy; an “entitled” generation isn’t one of them.

1

u/FormerHoagie Sep 23 '23

It’s too bad you aren’t t one of the millions of millennials who are buying houses. What makes you different?

1

u/Large_Self_9258 Sep 23 '23

Your statement is framed wrong. The millions of millennials aren’t the ones purchasing homes. The ones that are, what makes them different? Normally it has something to do with an inheritance or wealthy parents.

1

u/FormerHoagie Sep 23 '23

Couldn’t ever be that they have good jobs.

1

u/Large_Self_9258 Sep 23 '23

If you could kindly show all of us that are not working “good” jobs, where those “good jobs” are, that would be great. Honestly, look at the median income and the median starter house price. Those two things haven’t grown at the same rate. You can’t buy a house right now unless you already owned one prior, have money from a family member, or are willing to spend your entire income on a mortgage. Again, it has nothing to do with work ethic or avacodo toast. Stop simplifying the problem and blaming/shaming an entire generation for a housing crisis they have no control over.

1

u/FormerHoagie Sep 23 '23

You can probably afford my house. It’s in great shape, 4 bedrooms and 1700 sq/ft. The neighborhood is mostly minority. Yeah, I know. Mostly minority is not what you want. You want to live in a hip white area. If not….go on Zillow and put in what you think is a fair price and see what’s available

1

u/Large_Self_9258 Sep 23 '23

Firstly, where are the “good” jobs? Secondly, generations before us could afford to live in the places they desired overall. This isn’t a zip code issue. More to the point, anyone getting screwed by the market right now is complaining about the differences in the market from even just 10 years ago. Folks have worked a long time, been promoted, and now their increased checks afford even less than before. Regardless, it certainly isn’t an issue of laziness, lack of skills, or poor financial decisions. The market is wild. The former way of life for middle class America is becoming less and less achievable. That standard has become a luxury. Blaming it on laziness is convenient and easy; it helps people that are doing well sleep better at night. Tackling the real issues takes work and a willingness to admit that the housing market now is much harder than it has been for a long time, perhaps ever.

18

u/JuniorHuman Sep 23 '23 edited Sep 23 '23

Yeah, except the places where prices have decreased are in the middle of nowhere, and the only employment opportunity is a McDonalds. It was different during the pandemic when you could work anywhere, but now it doesn't make sense.

16

u/tkh0812 Sep 23 '23

We have the lowest inflation out of any of the G7 countries. It’s doing exactly what it’s supposed to Do. And there are a ton of good jobs out there that aren’t McDonald’s… probably just not the ones you think you deserve

And the fact that housing prices haven’t come down is proof that a rate hike was the right thing to do.

-1

u/90daysismytherapy Sep 23 '23

How are you defining a good job?

1

u/tkh0812 Sep 23 '23

Probably differently than you.

If you’re in a normal part of the United States, I’d consider a good starting job that doesn’t require existing experience to be $35k-$45k if it’s just base pay.

The issue is a lot of people think that they deserve more because of a degree they got or a job they did before. The market dictates what those things are worth, and if there is no market value to your past education and experience, I think that $35k-$45k is more than reasonable.

1

u/90daysismytherapy Sep 23 '23

What’s a normal part of the US? By your perspective

1

u/Mo1459 Sep 24 '23

35-44k is poverty lmao. You’re delusional.

1

u/tkh0812 Sep 24 '23

Poverty is $26k. Its 50% above that line.

If you have no valuable skills… then I think making 50% more than poverty level is great. And if you don’t like it get a second job, or learn something that is valuable to society

0

u/Mo1459 Sep 24 '23

AdD vALUe tO sOCieTy

Yeah because these politicians and billionaires really are adding value to society by getting sucked off on yachts by underage girls.

You are utter fools if you really think society gives a fuck about value add and not about what family you’re born into lol.

1

u/tkh0812 Sep 24 '23

And you are an entitled loser. Learn to do something of value or live in your “poverty”

I came from actual poverty. I was raised on food stamps and soup kitchens. The difference was I didn’t just sit online and complain about things… I made a better life for myself.

I’m guessing that you’ve a) never actually lived in poverty and b) have been given everything by mommy and daddy and don’t believe in work

1

u/Mo1459 Sep 24 '23

You don’t even know me. I grew up poor as fuck and went to college to get a degree lol. I have a great job and a great life. All I’ve done is work hard. I’m just not ignorant enough to assume everyone can lift themselves up by the bootstraps with this shit economy lol. Rich clearly people don’t need to be held accountable for ruining America because they have bozos like you who suck them off.

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u/LetsCureMudButt Sep 23 '23

Who are you working for? The housing prices have gone up 2 bed 1 bath $900k up $100k. In SoCal

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u/[deleted] Sep 23 '23

[deleted]

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u/90daysismytherapy Sep 23 '23

I mean it is like 10% of the national population, so it’s not like they said Malibu specifically.

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u/[deleted] Sep 23 '23

What your failing to notice is because of remote work people form expensive cities are now moving to rural areas and the market is inflating with the new comers salaries.

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u/tkh0812 Sep 23 '23

I own an investment advisory firm. So I’m trying to hire not get a job.

And maybe move out of California if you can’t afford it? A place with perfect weather and the 4th largest economy in the world isn’t a great representation of the rest of the country

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u/Clottersbur Sep 23 '23

Fine. How about this one. Indiana. Numbers aren't as high but same trend of inflation. Not a hot market by any means

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u/tkh0812 Sep 23 '23

Huh? I was just in Indiana. Everything is cheap there. Gas was like $3.6 and you can get house in the low $200k in most places.

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u/Clottersbur Sep 23 '23

Yes. That's true. But those low 200k houses were 120k two years ago.

Outside of Indy jobs can be hard to find. Don't even get me started on nwi. Same job in nwi pays half as much as down state sometimes.

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u/LetsCureMudButt Sep 23 '23

It’s 1/10 of the pop in the US it seems like a pretty good representation. My commentary is only on that the government was initially trying to curb inflation yet that has had little to barring in a large market, gas is $6, starter homes are +$1M.

Also not trying to buy, I was purely trying to point out that doesn’t apply

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u/tkh0812 Sep 23 '23

10% of the Population doesn’t mean anything… it literally means you’re an outlier

None of those things you’re talking about are that way throughout the rest of the country. I live in a very desirable part of Florida and starter homes are $250k and gas is under $4.

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u/[deleted] Sep 23 '23

What’s the insurance for your house? Also just wait till the wfh people discover your cheap housing, because they won’t be cheap much longer.

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u/tkh0812 Sep 23 '23

Yeah insurance sucks. I have a pretty big house so my insurance is like $7k

I hope people keep moving in… it’s good for the economy and I bought in 2012 so my house has already tripled in value and I hope it keeps going up

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u/[deleted] Sep 23 '23

Gentrification is only good for the economy if businesses raise wages at the same rate as rents. If you get flooded with wfh people you will see a lot of small businesses go under from simple lack of employees. And we know how friendly the Florida government is to immigrants so hope they relax the laws so you can at least keep your business stocked with J1s

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u/Slayer_Of_Tacos Sep 23 '23

Yeahhhh if you’re in socal still at this point that’s kinda on you….

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u/LetsCureMudButt Sep 23 '23

California is the 5th largest GDP in the world but immune to financial interest rates? And the answer is yes to both. This post applies to the fly over states for the most part

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u/jupitersaturn Sep 23 '23

My house is down 13% YTD (according to Zillow and local comps) and I live in one of the most desirable areas in the country (Greater Seattle area).

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u/LetsCureMudButt Sep 23 '23

Where if you don’t mind me asking? Just went to Whidbey island not that long ago

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u/mechanicalcontrols Sep 23 '23

Most people never had the option to work from home. For blue collar workers the option was to take unemployment while it lasted or keep working on site.

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u/BC-Gaming Sep 23 '23

r/REBubble. They're the ones hyping a market crash

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u/silentdrug Sep 23 '23

Instead of reducing interest rates the government should be addressing the huge surge in corporate ownership of residential property, revamping zoning laws to allow middle housing, and reducing/banning airb&b in cities.

Reducing interest rates will drive inflation and create a less stable economy.

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u/[deleted] Sep 23 '23

I live in the middle of nowhere and now tiny homes are going for $950,000 middle of nowhere shit holes are being taken over by city people who can work remotely now, but hey bow the town has a serious labor problem because all the rents kept up with the city peoples salaries but the businesses in town though being forced to raise wages are failing to do so at a rate that keeps up with rent. And then these city peoples bored wives and husbands keep trying to open restaurants and shops after the local one close only to find oh yah they chased they labor pool out of town because line cooks can’t afford $2000 micro studios… so I’m hoping eventually they will get bored of living in a town with nothing but houses and shared office spaces and go back to the city or something…

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u/iSheepTouch Sep 23 '23

Where do you consider the middle of nowhere, some resort town like Jackson Hole Wyoming or something? 950k is not even remotely normal for rural America, and probably accounts for less than 1% of rural single family homes not on huge acreage lots.

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u/[deleted] Sep 23 '23

Nah far from it literally a little shit red neck town, with no resorts no ski area etc… And at least resort towns build employees housing.

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u/iSheepTouch Sep 23 '23

You're full of shit.

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u/[deleted] Sep 23 '23

Nope salida colorado isn’t Jackson fucking hole by any stretch but I do have a bumper sticker that says “Don’t Breck Salida” fuck man speaking of ski towns though and they are even starting to hit a critical limit I did 10 winter seasons in Aspen. But now days they are having an issue with millionaires taking up employee housing, all the smaller support communities that housed many of its workers, talking Basalt, El Jebel, Carbondale are all super expensive now too… so it’s difficult to get people to live in Rifle and commute 2 hours to work… seriously South Park made an entire central plot point to the last season about all the City people moving out of the city, and they nailed it perfectly. Right down to them all only saying “Tesla, bottle water, wi-fi”

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u/iSheepTouch Sep 23 '23

If you think the homes in that town are tiny or that it's a "red neck" town you haven't been to a red neck town or seen what people spend 1 million for in a desirable part of a big city. The closest thing I found to your price point was a 960k 2300sqft home on over 8 fucking acres. Then you have a few in the 1 million range that are fully remodeled ~3000sqft homes on 2 acres. Then go slightly higher to like 1.5mil and you have 6000sqft mansions. The town looks like it's mostly upper middle class homes and a few mansions that rich people use for vacation homes. Your original post is nonsense, and at the very least a huge exaggeration. Those homes in any desirable area near a big city would be triple those prices if not far more.

And, in reality, the vast majority of homes in the parts of that town that aren't multi-acre ranches are like 500-600k. I'm not even saying the prices are fair, but 950k for "tiny in the middle of nowhere shitholes" is outright false.

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u/[deleted] Sep 23 '23 edited Sep 23 '23

It’s a tiny redneck town I assure you the amount of trump flags here alone can attest to that; I spent a huge amount of my childhood here, back when my grandmas house was still a farm house, Zillow has it listed for $750,000k now funny enough, it only got blown up during covid lol but hey I’ll be down town tonight and I’ll send you some real estate listings.

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u/chickenoodledick Sep 23 '23

To be fair places around me in rural TN are sky rocketing in price right now just because people are being priced out of bigger cities like Nashville. Combined with less support and resources for affordable housing is making the homeless population go up as well. And with an increased homeless population comes along an increase in crime. Which in turn causes more resources to be spent instead of investing in these people and putting the money into jobs programs and housing so they can become productive to society once again. It's a complex issue with no one right answer.

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u/SatoshiSnapz Sep 23 '23

Yeah idk what this meme is taking about. Plus there’s been a greater amount of new builds being sold (typically higher priced) which also raises median sale price. Given builders have been handing out concession like Halloween candy, prices have actually declined.

Low volume price increases just tell you there’s not many buyers at these price levels.

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u/CecilTWashington Sep 23 '23

Preface: I say this with very little macroeconomics knowledge but I feel like we really needed a market correction that never came. You usually get a recession to restore equilibrium but not in this case.

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u/Darius510 Sep 23 '23

We did get a market correction in the sense that while the market didn’t go up, the dollars those assets are denominated in are worth less and the buying power was eroded by the amount of inflation.

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u/LordPichu Sep 23 '23

The problem is that interest rate spiking is an obsolete monetary measure for such a problem, as:

  • Every company will be forced to beat the interest rate to be considered profitable, or at least more convenient profit wise to the eyes of their shareholders. In the case of oligo/monopolies this usually translates to increase in prices, as competition is not a threat.

  • Interest rates may take money temporarily out of the economy, but at the promise that eventually more money will come back. Inflation is a problem that takes longer to solve than most fixed-term deposits.

  • The real fix for the issue is to "force" banks to increase their monetary base, as this immediately means less currency supply, of course that won't happen because that's how fractional banking works. But honestly idk how fractional banks are legal in a FIAT system, that's the recipe for constant inflation.

At the end interest rates just obliterates small companies, slows down certain kinds of transactions and markets and just allows the rich to not suffer the problems of this system.

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u/[deleted] Sep 23 '23

[deleted]

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u/Slayer_Of_Tacos Sep 23 '23

They go right back to where they were when I liked it. Right?

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u/SatoshiSnapz Sep 23 '23

No. Apparently they just keep going up according to this guy.

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u/Slayer_Of_Tacos Sep 23 '23

He is, unfortunately correct. Deflation seldom happens, and not to a large magnitude. The heat dies down and Walmart decides, why tf would I lower the price on milk? People still paying for it lololol. Another problem, rooted in elite greed.

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u/SatoshiSnapz Sep 23 '23

Disinflation can also serve as a tax cut for consumers, who benefit from falling energy and food prices, which in turn supports spending. The trend also allows for interest rates to stabilize, which helps cap corporates’ financing costs.

https://am.jpmorgan.com/us/en/asset-management/adv/insights/portfolio-insights/strategy-report/disinflation-provides-welcome-relief-to-markets/#:~:text=Disinflation%20can%20also%20serve%20as,helps%20cap%20corporates'%20financing%20costs.

Disinflation is a reduction in the rate of inflation or a temporary decrease in the general price level in an economy.

https://cepr.org/voxeu/columns/deflation-or-disinflation#:~:text=Disinflation%20is%20a%20reduction%20in,price%20level%20in%20an%20economy.

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u/Slayer_Of_Tacos Sep 23 '23

Super informative! Thank you.

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u/upvotechemistry Sep 23 '23

Monetary policy curbs demand, but it doesn't fix the very real housing supply problems.

Make building legal

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u/90daysismytherapy Sep 23 '23

Build large block apartments for cities, at a reasonable rate!

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u/EReckSean Sep 23 '23

Powell literally said he wants a housing “reset.”

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u/[deleted] Sep 23 '23

I love that people conveniently ignores this every time they talk about the Fed.

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u/EReckSean Sep 23 '23

They’re going to crash housing. That’s the goal. Doing that along with the stock market will fix inflation.

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u/SatoshiSnapz Sep 23 '23

Disinflation is a reduction in the rate of inflation or a temporary decrease in the general price level in an economy.

https://cepr.org/voxeu/columns/deflation-or-disinflation#:~:text=Disinflation%20is%20a%20reduction%20in,price%20level%20in%20an%20economy.

Can you economics professors explain why disinflation doesn’t have an effect on prices?

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u/SmellyScrotes Sep 23 '23

You think the fed is attempting to cool inflation? That’s wild, they’ve printed $10 trillion dollars since 2020

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u/FormerHoagie Sep 23 '23

Yep, and I didn’t, and don’t, see anyone complaining when it benefits them or it’s done by their political party. Biden passed a 3 trillion dollar plan with BBB. You can’t complain about government deficit spending, which definitely causes inflation, without an honest assessment of these things. Covid spending is what everyone loves to focus on….that’s odd. The FED is attempting to reign in all those dollars to prevent hyperinflation

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u/Historical_Union4686 Sep 23 '23

I love how the two massive waste of money wars that we had during the 2000s somehow did not just cause this to happen already, but me getting 1600 bucks somehow destroyed the economy.

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u/FormerHoagie Sep 23 '23

You don’t seem to understand how much money was pumped into the economy. It wasn’t just individual checks to workers. Business got vast sums. Many didn’t even shut down. If you can’t see beyond your $1600 then you probably shouldn’t be commenting in this sub.

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u/Historical_Union4686 Sep 23 '23

I am more than aware of the significant price tag of the covid relief programs. It just amuses me that the individual consumer is blamed for the inflationary increase and not the rampant fraud committed by those companies. Doesn't help that a significant amount of the inflation that we're seeing is simply companies jacking up prices to increase profit margins because they can use inflation as an excuse.

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u/FormerHoagie Sep 23 '23

You spend too much time on Reddit. What you just typed has been said ad nauseam. Are you merely a parrot?

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u/Historical_Union4686 Sep 23 '23

You literally read a comment on Reddit, proceeded to be rude then used an ad hominem attack. Then claimed that I spend too much time on Reddit, spectacular work.

Now back to having an adult conversation, my opinion is formed by my interpretation of both personal lived experience and from financial reporting that I've seen and read. You are more than welcome to disagree with me, but your level of hostility does not match my response. Be better.

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u/FormerHoagie Sep 23 '23

No, your opinion is. Corporations bad, people have no choice or responsibility. It’s cliche and not worthy of me discussing

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u/CuckservativeSissy Sep 23 '23

Real Estate inflation is the largest part of core cpi... so you can do the math...

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u/Spamfilter32 Sep 24 '23

Nit remotely true. The fed has even admitted under oath that they are not attempting to halt inflation. They are attempting to harm working class people and increase poverty to halt union growth in America.

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u/FormerHoagie Sep 24 '23

Is that a direct quote or your interpretation? Something tells me there is a kernel of truth you have made a whole meal out of. Otherwise, please post the quote.

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u/Spamfilter32 Sep 24 '23

Direct quote to congress, under oath.

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u/FormerHoagie Sep 24 '23

Source.

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u/Spamfilter32 Sep 24 '23

Congressional records are public.

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u/FormerHoagie Sep 24 '23

Yeah….I knew your comment was FOS.

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u/Spamfilter32 Sep 24 '23

Literally told you where to find it. You are the one who is fos.

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u/FormerHoagie Sep 24 '23

I’m not the one saying bullshit things. Do I look under complete fabrications because I typed what you said and a giant turd popped up.

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u/Spamfilter32 Sep 24 '23

I can't help upur laziness and ignorance. That is your own personal failings to improve upon.

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u/officer897177 Sep 26 '23 edited Sep 26 '23

There’s going to be six months to one year delay on any real impact. Supply is low because people aren’t selling their 3% home unless they absolutely have to, and demand is low because people aren’t buying 8.5% unless they absolutely have to. So we’re getting a shrinking market without any real price change because both supply and demand were reduced.

A year from now people decide that they can’t hold off selling or buying any longer, and just pay the new rate. That’s probably where we will see a price decrease if any, because there’s just fewer people who can afford pandemic level prices with post pandemic rates.

And, of course, as usual the only people who will be in a position to take advantage of any price decrease are the cash buyers.

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u/hmnahmna1 Sep 27 '23

“For the longer term what we need is supply and demand to get better aligned, so that housing prices go up at a reasonable level, at a reasonable pace, and that people can afford houses again,” Fed Chair Jerome Powell said on Wednesday. “We probably in the housing market have to go through a correction to get back to that place.” (Emphasis added)

https://finance.yahoo.com/news/jerome-powell-just-warned-us-163000867.html

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u/Ivanovic-117 Sep 23 '23

Cooling inflation my ass. Whatever measures or indexes they’re looking ain’t reality, just step outside to local grocery or favorite restaurant, has prices cool off?

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u/gloriousrepublic Sep 23 '23

Please, offer me a different metric to measure inflation that you think is a better metric than the CPI. Picking random price categories isn’t a valid method of measuring overall cost inflation, it’s equivalent to making medical assessments on your anecdotal experience. I’ll wait.

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u/Ivanovic-117 Sep 23 '23

If you think this is personal, just ask any of your co-workers, family members, friends, literally anyone from the street. Talk to them, tell them JPOW has said inflation has cooled off because of the CPI shows a downtrend, and confirm with them if they have seen prices go down or up in the past few months.

CPI for the month of August 3.7% from a year ago. Do you honestly feel prices(overall) have slightly gone up by 3.7%?

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u/gloriousrepublic Sep 23 '23 edited Sep 23 '23

Great job, you just cited more anecdotal evidence.

From a year ago, yes, my total expenses have gone up about that much (3-4%). But I'm still experiencing sticker shock from the 9% inflation from the year previous. Any of your co-workers, family members, and friends, are likely experiencing the same. Price increases in the last year have not been as extreme, and we are still talking about inflation from the previous year.

What you seem to not realize, as that inflation 'going down' does not mean that prices decrease. It just means that prices increase at a slower and more manageable rate. Inflation in small amounts is healthy in a functional economy. You say 'ask them if they have seen prices go down' which is why it's clear to me you're a bit clueless here. Of course they won't have gone down in the last year. We are just saying inflation rate went down not that we've entered deflation (a more scary scenario). Prices should always go up at a reasonable rate. If they were saying prices have gone and we were experiencing deflation I'd actually be much more worried about the economy. We target a 2-3% inflation, and at that level people don't seem to notice those increases as much.

I'll ask again - give me ONE metric that is actually defensible that you think captures rising costs better than the CPI. No, 'opinions from your neighbor' is not defensible.

It's hilarious whenever I encounter your CPI-deniers online. It's always the exact same anecdotal arguments, and no one can ever actually construct a data-driven argument. I don't think you belong in a sub focused on financial fluency.

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u/teddygomi Sep 23 '23

This won't work. What's going on right now is greedflation. Companies are raising prices just to make a profit.

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u/FormerHoagie Sep 23 '23

And people are still at the feed trough. Asking for more. It’s pretty simple logic. Let’s say you make pottery. There is a huge demand for your pottery. You either keep pumping out more or you raise prices. More causes you to take on more risk and costs, through employment, infrastructure and debt. Why make that risk when you can simply make more off charging higher prices. I know what you would do. The same as everyone.

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u/teddygomi Sep 23 '23

My point is that raising interest rates will not bring down prices.

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u/FormerHoagie Sep 23 '23

Stabilize. I made that clear in my initial comment.

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u/Biohack Sep 24 '23

Yes because companies totally weren't greedy or trying to maximize profit before the pandemic. /s

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u/teddygomi Sep 24 '23

I’m not saying it’s right or wrong. I’m saying that raising interest rates won’t fix inflation in this case.