How do you suggest we establish policy to curb and control inflation?
Balancing the Federal budget would certainly help. Getting rid of the non-cellulosic ethanol subsidies would help the price of food too.
Do you really think it's the expectation of increased wages for the lowest earners in the country that's pushing inflation?
It's wage expectations in general. I can't say with certainty how much is attributable to low-income earners, but one would expect that those wages make the most difference to retail sales prices (groceries and other basic needs), since they have a lot of min-wage workers. Thus, any inflation generated is going to disproportionately harm those who buy those products - i.e., the lower income brackets.
Why is it better to jump the minimum wage multiple dollars at random times than to have a program that increments it on an annual basis?
Because it bakes inflation into employment law. When min wage hikes are nonpredictable, people don't usually build them into their budgets or prices. But once it's a locked-in part of the system, employees are going to plan for their mandated annual raise, and companies are going to build in regular prices increases to handle those raises. Since those price increases become the next year's inflation, they then trigger higher raises, which means the companies plan larger price increases....etc...etc... That's called an inflationary spiral, and it's a Really Bad Thing.
The most likely result, IMHO, is that wages spiral up to the point where it becomes cheaper to invent an automated system to do the job. Then the workers all end up getting fired anyway.
The illusion is that a macroeconomic free lunch exists; that a government can just mandate that more money should go in a particular direction, or to particular people, without side-effects. But economics is so cross-connected that there are always second, third, and higher-order consequences. Often, these take several years to show up, which means it's easy to blame something else. This, of course, makes economic "quick-fixes" very tempting to politicians who don't see past the next election, and who cause immense harm when they mettle without doing a deep enough analysis.
It seems to me that simply regretting inflation isn't going to go away, and I don't think it's driven by minimum wage. I think it's driven by the corporate investment structure and the pressure to increase profits in order to appear healthy.
If that were true, it would cause the stock market to climb, and that certainly hasn't been happening this year. While corporations are greedy by nature, there's enough competition out there in most industries that corporate profits, as an overall percentage, aren't excessive (yes, there are certain companies, like Microsoft, and cartels like OPEC, but they're the exception, not the rule).
As to paying for all this, if you streamline efforts in places like Iraq to stop pouring billions into useless companies such as Cheney's associates run, there's billions of dollars to be pulled.
It's important to note that the Iraq war isn't actually being paid for. China (amongst others) loaned us the money for it, and we're going to be in debt for it for a long time.
Apart from that, why is it ok to go trillions into debt in order to engage in stupid war and not to endure some debt in order to address domestic poverty, health, and quality of life issues?
Just because the last President sent us trillions into debt with military spending does not mean that it's a good idea for the next President to send us trillions further into debt with domestic spending.
Most of the programs he's talking about sound like miniscule or small proportions of the federal budget, but things that might be significant benefits to low-income and working families.
Some of them may be, and I'd support measures that make financial sense. But some of those promises are definitely not low-budget.
no subject
Balancing the Federal budget would certainly help. Getting rid of the non-cellulosic ethanol subsidies would help the price of food too.
It's wage expectations in general. I can't say with certainty how much is attributable to low-income earners, but one would expect that those wages make the most difference to retail sales prices (groceries and other basic needs), since they have a lot of min-wage workers. Thus, any inflation generated is going to disproportionately harm those who buy those products - i.e., the lower income brackets.
Because it bakes inflation into employment law. When min wage hikes are nonpredictable, people don't usually build them into their budgets or prices. But once it's a locked-in part of the system, employees are going to plan for their mandated annual raise, and companies are going to build in regular prices increases to handle those raises. Since those price increases become the next year's inflation, they then trigger higher raises, which means the companies plan larger price increases....etc...etc... That's called an inflationary spiral, and it's a Really Bad Thing.
The most likely result, IMHO, is that wages spiral up to the point where it becomes cheaper to invent an automated system to do the job. Then the workers all end up getting fired anyway.
The illusion is that a macroeconomic free lunch exists; that a government can just mandate that more money should go in a particular direction, or to particular people, without side-effects. But economics is so cross-connected that there are always second, third, and higher-order consequences. Often, these take several years to show up, which means it's easy to blame something else. This, of course, makes economic "quick-fixes" very tempting to politicians who don't see past the next election, and who cause immense harm when they mettle without doing a deep enough analysis.
If that were true, it would cause the stock market to climb, and that certainly hasn't been happening this year. While corporations are greedy by nature, there's enough competition out there in most industries that corporate profits, as an overall percentage, aren't excessive (yes, there are certain companies, like Microsoft, and cartels like OPEC, but they're the exception, not the rule).
It's important to note that the Iraq war isn't actually being paid for. China (amongst others) loaned us the money for it, and we're going to be in debt for it for a long time.
Just because the last President sent us trillions into debt with military spending does not mean that it's a good idea for the next President to send us trillions further into debt with domestic spending.
Some of them may be, and I'd support measures that make financial sense. But some of those promises are definitely not low-budget.