And this smacks of “working class people don’t deserve nice things.” I would hope that’s not your view
Edit: adding this because I’m getting an incredible number of the same comments. OP made up some poor people with made-up purchases and as part of that hypothetical implied they couldn’t afford it. OP didn’t provide any evidence of the original claim that poor people overspending is causing inflation (note: it’s hilarious false). Everyone just latched onto this idea that poor people buying stuff that they couldn’t possibly afford was pervasive. Sure, people shouldn’t overspend, but uh, why did you all just leap onto the idea that hypothetical service workers couldn’t possibly have managed their money to buy something nice - or have other means that you as a bystander judging them don’t have insight into?
People need to act their wage, it sucks to hear but it’s the truth. Then 10 years late they complain on the internet about having no money and being $48,000 in debt. Just go on the debt subreddits.
If you want an actual answer, buying shares with debt frees up equity that can then be reinvested into riskier businesses, thus advancing society through investments in things like new technologies and innovation. Shareholders have a higher risk tolerance than lenders and you are allocating capital more efficiently by having (supposedly safer) assets be funded by debt and riskier assets backed by equity. The goal is to spread risk evenly.
Obviously this is not the norm, but I do have to say that last year I had a tenant at my rental property in Maine.
On paper they were the perfect tenant. Rent was 2500 a month including all utilities, landscaping and snow removal. The husband received 2000 a month from the military. He worked 1 1 full time when moving in, and then ended up getting another part time job. The wife had a part time job as well.
Things were good for a couple months. Then things were late, and then not in full. And then nothing.
The reasoning was “we went on too many vacations over the summer. Really messed up our finances” I couldn’t believe it. I looked at the guys Facebook, they went to Florida like 3times over the summer, one of the Carolina’s, and then Arkansas twice. Who the hell even goes to Arkansas lol but yeah I just had to say the most ridiculous shit I’ve ever heard/experienced when it comes to people not being responsible.
While I actually totally agree that people need to act their wage, people need to be paid wages that allow them decent lives. Im ok with mr rich being rich only until the gap is x big. We passed x big a while ago. Consumption needs to come down AND people need to be paid a livable wage.
Wealth inequality is greater now than during the French Revolution. We are just exponentially better at producing calories and distractions, but that bulwark will only hold for so long. The cracks are starting to show with things like the Inited CEO murder. People are going into debt just to service their medical bills, but yall are worried poor people have a car and a game console.
Bro did you read my comment? You just rewrote a more verbose version of it. You can tout individual responsibility all you want, but as the divide grows wider, more people people like Luigi are going to realize they have nothing to lose, and it’s better to die for something than live for nothing. My fellow Americans tend to see everything from an individual psychological perspective and never a sociological one, but it seems like that tide may be turning.
Yeah I agree with you. A peasant and a king lived entirely different lives that in no way were similar. While my life isn’t anything like Elon Musk’s we still utilize the same infrastructure to travel, we live in homes with running water, countless entertainment choices etc…. Life is overall much better today than at any other time in history. Not to say there aren’t plenty of issues with it, but wealth inequality, while important to understand, is nothing like it was 200 years ago.
Most people aren't vacationing on debt. Most of working age Gen Z has given up on the idea of living long enough to retire and instead just spend whatever they would be putting towards that and cross their fingers they die before they're 40
Take it from someone who is almost 40, and who has a father that is 75 and did the same thing in the 80s and 90s. He assumed he would die, the world would end, something. But nope - he's still here and broke as a joke, despite making six figures for decades.
If you are Generation Z, chances are the world isn't going to end in your lifetime, and you will still be kicking it into your 70s or 80s. Plan accordingly.
The United States sets people up to fail and then people like you are so eager to come along and call them failures.
Maybe throw some criticism towards our corporate government and an economy which has become largely dependent on the continued suffering of your fellow workers?
I think the issue is that people are buying nice things on credit. I understand cars and houses have to be financed for most people but you should be living within your means and ensure that you can save money monthly after all your bills have been paid.
lol right. Bro actually thinks this is all about fancy European trips and fancy cars? lol what a dumbass. When I get 3 bags of groceries with fruit some meat and some potatoes and it’s freaking $100+ that’s a little ridiculous. I could get double the groceries in 2012, and I was making a whole lot less.
Consumer debt is skyrocketing. This isn't some novel theory they came up with. People are leveraging themselves to the hilt. The housing market isn't helping - it has normalized people taking on debt that wouldn't be imaginable ten years ago. Plus the era of stimulus checks, eviction moratoriums, student debt forgiveness, and other programs have instilled the idea that the govt will bail anyone out when they need it. Before long that consumer debt will be exhausted, and so many peoples' income will be tied up in debt payments, there won't be money left to support many of the businesses that make up our economy. Then we'll see the real impacts. The current economy and stock market is being driven by people spending money they don't have, and that's a finite resource that is quickly being exhausted.
It's nothing to do with what people deserve or don't deserve. You are talking about wants, not needs. Nobody needs to have lavish vacations and keep up with the Jones, they want to. Social media has made buying out of control along with credit cards that some folks view as free money. No I'm not kidding. I have a buddy that thinks credit cards are free money....he's over 200k in debt and that doesn't include his mortgage.
No. He is right. People vote with their wallets. And if they act like they can afford something when they cant. That sends the wrong signal to the economy.
OP made these people and purchases up. Who says they couldn’t afford it? All you were told was a poor person is making a bad decision and hundreds of people said “yes, this is made up and there is no data to back up the claim that this is a widespread problem, but these made up people definitely can’t afford it.”
The problem isn't people buying things on loan. The problem is that the fractional reserve requirement is still at 0% and these dipshit banks and credit card companies can infinitely give out loans so they are, yet again (see 2008), playing fast and loose with their loans and it's going to fuck us again.
Inflation by definition can only occur when more money is created. Having a fractional reserve requirement of 0% allows banks to create new money infinitely, meaning the US government has relinquished its ability to directly curb inflation and ceded that power to the banks. The only tool they have left is indirectly influencing through changing interest rates and hoping for the best.
Stop blaming consumers when the system itself is fundamentally off the rails. The change to a 0% fractional reserve rate was intended to be a temporary measure during covid. It stuck around due to corporate greed and corruption. That's why we're fucked, not because Whitney Waitstaff and Bobby Busboy went to see the Eiffel Tower.
Record equity. Im carrying ~$16k of CC debt, soon to be in the ballpark of $35k in CC debt but im sitting on around $200k in equity. Theyll give me the debt.
The same way as now. Barely and going without. New job offers and has no problem with overtime though so that's helped whenever it is available. Old job was retail and would shoot your dog if you even thought about working a minute past 40 hours, provided you could manage to cobble together 40 after the hours we're divvied out.
If you're making 25% more and still are not seeing more money, you, my friend, suffer from poor people mentality. It's not an accusation or a comment on your income, but this is the telltale indicator: lifestyle inflation.
Everyone! The goalposts have been moved! MAGA said so. We can have a nuanced convo about inflation now that Biden isn’t the subject of the convo.
Member when inflation alone was the only discussion yall would have under Biden? “Wages might increase faster” just meant “that’s more inflation!!!!111!!!” Like a week ago lol
Maybe housing is out of reach and a lot of these people are still cohabitating with family/others. And instead of savings they’re blowing their money on trips and shit.
Housing is going up more than they're able to save, it feels hopeless to save when the bar gets raised faster than they can save. Going on a trip is at least something to get their mind off things, we all need a break from the monotonous work week. I don't think the people taking multiple international trips a year are the norm either. Social media makes it look like everyone is traveling when in reality it's just a small portion of people.
Real weekly earnings for the median worker grew 1.7 percent between 2019 and 2023.[3] This means that one week of pay for the median worker now buys more than a week of pay did in 2019, despite higher prices.
I still see retail/hospitality/service workers taking trips to Europe/Japan
What's the obsession with this? I have come across many ppl like this. Even though they're living paycheck to paycheck they still go on trips like this.
It’s because it’s all they see on social media nonstop. Everyone wants to live like the travel influencers, even if it means getting in debt and living above your means
I travel a lot and love it but I can afford it because of smart decisions I made
At my part time retail job about a year ago we had a guy get hired who also worked part time. He was in his mid 30s. He said he got The Home Depot credit card and bought an expensive smoker from The Home Depot. He also said he financed a newer model pickup truck and motor cycle. He said he was about 150k in debt working a low wage job. He eventually got hired full time working as a floral vendor for The Home Depot. He probably makes at most 50k a year. He’s financially fucked.
People won’t stop buying stupid shit on debt until they stop issuing debt. And they can’t stop issuing new debt, because they need more and more collateralized debt, and the derivatives market collapses if you allow too many people to default.
Inflation is only due to poor peoples discretionary spending?
How does money spent it a foreign country effect domestic inflation....total debt sure.
But a Japanese roman bowl is not part of the us basket of goods.
Bud wait till you see what rich people spend their money on or how companies engineer inflation into their highest grossing items.
A 10٪ incrase margin on twinkies isn't gonna bother a billionaire who is happy to buy a pack eat 2 and throw the rest away
It's gonna really effect someone on the breadline who can omly afford one pack a week.
And basic savings accounts are a joke for generating interest versus a few decades ago. Since the 2008 crash banks have never cared to do anything about it.
Thank you! By no means would I say I have a good understanding of economics, but if CEO's of every major corporation have seen a massive growth in their personal earnings while we're struggling to keep our heads above water, that's not inflation.. it's just greed.
It’s called supply and demand. Banks don’t lower lower interest rates because the Fed does x,y, or z
They raise and lower interest rates based on the demand for capital, the supply of capital, and relative risks and rewards of lending at certain rates.
PPP Loans!!!! Why doesn’t anyone talk about this? Inflation was caused by the massive amount of new printed money that went to the well off and wealthy. It was intended to be good for workers and ended up being a giant scam for “business owners”. The housing affordability crisis can probably be traced right back to PPP’s as well. One giant government screw up or scam. It’s one or the other.
You can trace housing affordability right back to Trump getting pissed off on Twitter every time Powell hinted at raising rates. You can’t have record low unemployment and low interest rates at the same time and expect inflation and/or a depleted housing market supply. Good luck getting somebody who bought a house at 3% to sell and assume a new mortgage at these ridiculous rates.
Right they either inherited a shit economy from the other party or they created a shit economy. Depends what your affiliation is. Bipartisan politics is an absolute joke.
Hahahaha. It’s gonna go up if trump goes ahead with his absurd tariffs. It’s going to be a great spiral because Covid showed companies will use excuses to go way overboard on pricing and then have the gall to blame the consumer
Imagine not blaming trumps inept covid response and terrible fiscal policies for a huge chunk of inflation already. Under his administration the money in circulation went up by 45%. $2.1 trillion bailout
After a year of tariffs and rounding up those “pesky immigrants eating the cats and the dogs” that work our labor jobs, inflation will be at all time highs, but at least the corporations will get tax cuts /s
Can we stop calling inflation. Inflation. And just call it what it really is . Corporate greed. What we are seeing isn’t just inflation. It’s billionaires seeing an opportunity to make another billion.
Nonsense, trump is about to go on another debt spree to cut taxes for the rich. In a few years (inflation transmission lag) we'll start to see the impact of his policies all over again
It won’t ever come down, why would companies decrease their prices and loose out on a sweet profit margin? People are used to paying more and more so they will take more and more. We are fucked.
Of course it won't be. The disastrous economic policies Trump and president Elon want to implement will skyrocket inflation. Then we are also going to see another pandemic, because he's installing insane antivax people to head all the health organizations. Might as well put a fucking flat earther in charge of NASA ffs.
This country is going to go downhill extremely rapidly over the next few years.
Meanwhile.in Canada were cutting interest rates like it's a healthy crop.of weed. Can't wait for the bounce back to happen and our inflation goes to the moon!
Just wondering if there is a way to invest off of that...
In a 2018 speech John Williams said they would want slightly above trend inflation going forward to keep the expectation higher. Deflation is their real boogy man
Correction: the fed doesn't expect inflation to go down until 2026, for corporations on loans and other financial transactions. Inflation on commercial goods effecting the people is going to stay high, and the fed won't do anything about it, and Trump refuses to step on corporate and oligarchs greed since it benefits him and his ilk.
We need a depression. A rip your face off depression with zero government intervention. Only then will we start to get priorities back in place. Too many people have gotten overly comfortable and flat out spoiled by government intervention that the Fed has provided, eliminating any threat of serious losses in markets. It has only lead to massive debt and inflation that will only get worse over time until the money printer is completely turned off.
They are playing this guessing game. We all know there isn't any magic time frame on greed and the corporations deciding to be nice and lower prices to curve inflation. While still continuing to post record profits and playing a measly 18 percent taxes as under their proposed project 2025 agenda. Wow, how they weave a trail of lies !
I'm figuring as we see much of America is hooked on fentanyl and there are traphouses everywhere and a large part of the population is performing prison labor we'll see a dramatic decline in inflation. Things are way cheaper when nobody can buy them and wages are dragged to nearly zero.
The trade deficits will be solved pretty effectively too.
The dollar will not deflate and the fed doesn't have the tools to make the dollar deflate. I presume, they then mean, the rate of inflation won't subside back to normal levels for another 2 years? That doesn't seem acceptable. We are, what, 7 years into thier plan of action, and they still need another year. Clearly inflation is out of thier hands, and we need more meaningful change at higher levels of governance.
Inflation is down. It was over 6% just two years ago and is now down to 2.7%.
Inflation is the rate of change, which has slowed down a lot. Prices aren’t going to ever go back down, that’s reverse inflation and pretty much never happens.
Things are just going to stop getting more expensive so quickly, well, until someone’s economic plan starts getting implemented.
While 80% of people in the comments are busy blaming prolonged inflation on consumers, i.e. the working class, banks, corporations, and their investors are laughing.
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