[quote=pri_dk][quote=Rich Toscano]Prices at your local Ralphs have in fact been rising. They have at Albertson’s too (at least according to the CPI).[/quote]
I appreciate the rest of your response, but there are a lot of hypotheticals in your argument.
As far as inflation being the only “politically expedient” way to manage the debt, it does makes sense. But I recall hearing that same claim during the Reagan administration (I was one of the folks making the claim). More than twenty years later, it still hasn’t happened.
A fundamental problem with the “inflate the debt away” argument is that it assumes that there are people in power with a “master plan” and a long-term vision on the economy (10+ years). There really is nobody in government making these sorts of decisions (if there is, they are cycled out every few years anyway.) Now it may be the case that the culmination of short-term decisions will ultimately lead to unstoppable inflation in the long-term. But even if this does happen, the long-term may me much further out than many are predicting.[/quote]
Go to the BLS website and chart food inflation… grocery store was the example you used.
You might have been right in the 80s, eventually, but the Asian mercantilists came in and propped up our currency while bringing down goods prices, which extended the fun for quite a while (and may yet do so). But someday that will stop if not go in reverse.
I agree that there is no master plan. Didn’t mean to imply that, as I agree that politicians are motivated by the short term. I meant that the aggregate decisions will move toward an inflationary outcome because there is really no other politically expedient outcome (and as a bonus, inflationary policy is appealing to short-sighted politicians on its own “merit”).
