Has the debt economy reached its limit? Solutions?

[goat]

The CPI is extremely transparent in its creation. I will believe their numbers above your bizarre conspiracy theories. Education, housing, and healthcare are all included in the CPI.



You started by claiming that they were excluded, and now you admit that was just a lie, but are claiming they are not weighted properly. If prices go up, then it will be a greater weight of income, so your claim falls apart. Lets say the basket includes 4% of a year of college tuition. If the cost of a college tuition doubles, that will be a larger share of the basket.

What could change the weight is if more people went to college. Lets say the average person is paying for 5% of a year of college, not 4%. That would throw off the calculations... For a while. Every couple of years, they readjust the basket items.



Roberts is an 82 year old Holocaust denier, who has not done any academic economic work in nearly 50 years.

The CPI is a scam that is intentionally skewed to hide real inflation. I'm willing to go through the method government uses to give the appearance of low inflation as long as you no longer cite the government as proof for your assertion.

[Walt]

The CPI is a scam that is intentionally skewed to hide real inflation. I'm willing to go through the method government uses to give the appearance of low inflation as long as you no longer cite the government as proof for your assertion.

The CPI underestimates substitution, and underestimates new technologies. Both those drive down inflation, but are underestimated by the government. If milk prices go up, people are more likely to switch to orange juice, but the CPI does not take that into account. The CPI ignores new technologies that drives down prices. Who cares how high the cable bill is, when most young people watch TV on their computers (or more likely their cell phones now).

And inflation is easy to spot. If it gets out of whack with government numbers, you would realize it. Lets say we had hyperinflation (about 50% a month, or about 10,000% a year), but the government claimed we only had 2% a year inflation. A year later, candy bars would cost $200, and you would know the government numbers were all a lie. Any store trying to sell a candy bar for $2 would quickly be cleaned out. I have been to countries like that, and the USA in 2021 is not one of them.

[goat]

The CPI underestimates substitution, and underestimates new technologies. Both those drive down inflation, but are underestimated by the government. If milk prices go up, people are more likely to switch to orange juice, but the CPI does not take that into account. The CPI ignores new technologies that drives down prices. Who cares how high the cable bill is, when most young people watch TV on their computers (or more likely their cell phones now).

And inflation is easy to spot. If it gets out of whack with government numbers, you would realize it. Lets say we had hyperinflation (about 50% a month, or about 10,000% a year), but the government claimed we only had 2% a year inflation. A year later, candy bars would cost $200, and you would know the government numbers were all a lie. Any store trying to sell a candy bar for $2 would quickly be cleaned out. I have been to countries like that, and the USA in 2021 is not one of them.

Can we agree the CPI intentionally skews the inflation of housing, healthcare, and education?

[Walt]

Can we agree the CPI intentionally skews the inflation of housing, healthcare, and education?

No, we cannot agree. If anything, the CPI has been proven to overstate inflation on Social Security recipients. It is targeted at urban office workers who have to buy their own houses, pay for new education, and pay for their own healthcare. Most retired people already own a house, or live in an apartment with more stable rent. They are unlikely to be taking on a new mortgage. They are even less likely to be paying for education. There are 70 year olds in college, but that is the exception, not the rule. And most importantly, Social Security recipients have Medicare, so are not paying the full force of their medical expenses.

Study after study shows that inflation on Social Security recipients is overstated, not understated... Or to be more accurate, most of the time. When inflation happens quickly, it takes Social Security a year to catch up, so we are in for a few bad months for Social Security recipients...

But there were some very good years there, where Social Security recipients got bigger increases from a year before than they were seeing when they got it. And there was even deflation where Social Security recipients did not see their Social Security checks go down.

[goat]

No, we cannot agree. If anything, the CPI has been proven to overstate inflation on Social Security recipients. It is targeted at urban office workers who have to buy their own houses, pay for new education, and pay for their own healthcare. Most retired people already own a house, or live in an apartment with more stable rent. They are unlikely to be taking on a new mortgage. They are even less likely to be paying for education. There are 70 year olds in college, but that is the exception, not the rule. And most importantly, Social Security recipients have Medicare, so are not paying the full force of their medical expenses.

Study after study shows that inflation on Social Security recipients is overstated, not understated... Or to be more accurate, most of the time. When inflation happens quickly, it takes Social Security a year to catch up, so we are in for a few bad months for Social Security recipients...

But there were some very good years there, where Social Security recipients got bigger increases from a year before than they were seeing when they got it. And there was even deflation where Social Security recipients did not see their Social Security checks go down.

By Charles Hugh Smith, Oct. 05, 2017

It's not exactly a secret that real-world inflation is a lot higher than the official rates--the Consumer Price Index (NYSEARCA:CPI) and Personal Consumption Expenditures PCE). As many observers have pointed out, there are two primary flaws in the official measures of inflation:

1. Big-ticket expenses such as rent, healthcare, and higher education - expenses that run into the thousands or tens of thousands of dollars annually - are severely underweighted or mis-reported. While rents are soared, the CPI uses an arcane (and misleading) measure of housing costs: owners' equivalent rent. Why not just measure actual rents paid and actual mortgages/property taxes/home insurance premiums paid?

Healthcare is 18% of GDP but only 8.5% of CPI. To those exposed to actual costs of healthcare, 8.5% of the CPI is a joke.

The same can be said of higher education: households paying tuition and other college costs are exposed to horrendously high rates of inflation, as illustrated in this chart:



https://seekingalpha.com/article/411...her-advertised

[Walt]

1. Big-ticket expenses such as rent, healthcare, and higher education - expenses that run into the thousands or tens of thousands of dollars annually - are severely underweighted or mis-reported. While rents are soared, the CPI uses an arcane (and misleading) measure of housing costs: owners' equivalent rent. Why not just measure actual rents paid and actual mortgages/property taxes/home insurance premiums paid?

Healthcare is 18% of GDP but only 8.5% of CPI. To those exposed to actual costs of healthcare, 8.5% of the CPI is a joke.

The same can be said of higher education: households paying tuition and other college costs are exposed to horrendously high rates of inflation, as illustrated in this chart:

Someone receiving Social Security is almost always receiving Medicare(discounted supplemental, and drug insurance). That means most of their healthcare costs, especially the high end stuff going up most in price is covered by the government. That is why Medicare cost to the taxpayers rises faster than inflation. Raising Social Security makes no sense based on the total healthcare share of the economy, but rather the average Social Security recipient share.

Most retired people have already paid off their mortgage. If they are buying a new house, it is to downsize. They are more likely to have a huge income from higher house prices than to have a huge loss. And they are allowed to keep that income once tax free. Even if they just rent, their rent is often stabilized.

As for education, I am not saying no retired people are going to college, but very few are. Even those that do go to college often get huge discounts.

I do agree the basket should be more tuned to retired people than the current basket which actually is for urban office workers. But I think that would actually decrease Social Security increases, not increase it. The major things rising faster than average inflation are overemphisized.

[goat]

Someone receiving Social Security is almost always receiving Medicare(discounted supplemental, and drug insurance). That means most of their healthcare costs, especially the high end stuff going up most in price is covered by the government. That is why Medicare cost to the taxpayers rises faster than inflation. Raising Social Security makes no sense based on the total healthcare share of the economy, but rather the average Social Security recipient share.

Most retired people have already paid off their mortgage. If they are buying a new house, it is to downsize. They are more likely to have a huge income from higher house prices than to have a huge loss. And they are allowed to keep that income once tax free. Even if they just rent, their rent is often stabilized.

As for education, I am not saying no retired people are going to college, but very few are. Even those that do go to college often get huge discounts.

I do agree the basket should be more tuned to retired people than the current basket which actually is for urban office workers. But I think that would actually decrease Social Security increases, not increase it. The major things rising faster than average inflation are overemphisized.

Can we agree that real inflation is close to or at 10%? Some sites are showing inflation as high as 15% to 18%, and projecting it to be at 20% in a year or two.

[goat]

Where'd all my friends go? Don't make me post down in JPP Jeopardy.

[Jolly]

It does seem like the economy are very close to falling apart. Inflation is high and will continue higher but Federal Reserve sems to be powerless.

In our economy debt must grow. Only new debt can pay for old debt. At some point debt can not be repayed.

Historically there have been debt jubilees where all debts are cancelled by the ruler. In the Torah debts are to be forgiven every 7 years.

So a new system is necessary.

Certianly, however those inpower are only interested in new systems that maintain there positions.

Something with much more control over each individual.

Well that's not a given, there are many ways to form a new system, more centralised control over the population has far more negatives then positives.

People have to live in fear so they do not revolt when their standard of living plummets. The few that are left because they do not want billions of people. Something similar to Chinas social credits. And only digital currencies so everyone will know they are watched in real time.


But Covid fascism is not working well enough for them.

So my question is, can war be a solution for them?

Sadly has been historically.

A larger one where people feel that fascism/communism is nothing in comparison. Because i am spiritually told that some in the Biden administration want war.

Sure some do but it's not politics that is pushing it, these desires are coming from the corporate sectors as usual, and politics serves those interests.

Also please discuss solutions. If we have reached the limit for the debt economy can we through cooperation between the larger nations cancel debts without turmoil in markets?

Ofcourse you can but the banks want turmoil, every house foreclosed is taken by the bank, every country that goes bankrupt is then sanctioned and has new rules imposed by thise same interests, Greece is a perfect example of what the banking community would like to do with every country.

The problem for them may be that in such a solution they lose influence

Sure. But reason and logic can do a lot to drive a better future.

[Jolly]

Can we agree that real inflation is close to or at 10%? Some sites are showing inflation as high as 15% to 18%, and projecting it to be at 20% in a year or two.

They want inflation as a means to reduce the debts.

[goat]

They want inflation as a means to reduce the debts.

To the point when the dollar is worthless.

BTW, Welcome.

[goat]

It does seem like the economy are very close to falling apart. Inflation is high and will continue higher but Federal Reserve sems to be powerless.

In our economy debt must grow. Only new debt can pay for old debt. At some point debt can not be repayed.

So a new system is necessary. Something with much more control over each individual. People have to live in fear so they do not revolt when their standard of living plummets. The few that are left because they do not want billions of people. Something similar to Chinas social credits. And only digital currencies so everyone will know they are watched in real time.


But Covid fascism is not working well enough for them.

So my question is, can war be a solution for them? A larger one where people feel that fascism/communism is nothing in comparison. Because i am spiritually told that some in the Biden administration want war.

Also please discuss solutions. If we have reached the limit for the debt economy can we through cooperation between the larger nations cancel debts without turmoil in markets? The problem for them may be that in such a solution they will lose influence.

6.5 minutes of your time.

[Walt]

Can we agree that real inflation is close to or at 10%?

Real inflation has been one point lower than headline inflation, so maybe 0% or 1% for the last decade. It has certainly not been even close to 10%.

Some sites are showing inflation as high as 15% to 18%, and projecting it to be at 20% in a year or two.

If that were true, interest rates would need to be 30% or higher... And they are somewhere between -1% to 4% depending on the borrower. The cost of money is about zero percent.

You will always be able to find a conspiracy website that predicts inflation is much higher. But, reality is you would be hard pressed to find even one component of inflation that has been above 10%, much less the entire thing.

[goat]

Real inflation has been one point lower than headline inflation, so maybe 0% or 1% for the last decade. It has certainly not been even close to 10%.



If that were true, interest rates would need to be 30% or higher... And they are somewhere between -1% to 4% depending on the borrower. The cost of money is about zero percent.

You will always be able to find a conspiracy website that predicts inflation is much higher. But, reality is you would be hard pressed to find even one component of inflation that has been above 10%, much less the entire thing.

Year-to-Year April 2021 ShadowStats Alternate CPI (1980 Base) Inflation jumped to a thirteen-year high of 12.1%, up from 10.4% in March 2021, 9.4% in February 2021 and against 9.1% in January 2021.

[Walt]

Year-to-Year April 2021 ShadowStats Alternate CPI (1980 Base) Inflation jumped to a thirteen-year high of 12.1%, up from 10.4% in March 2021, 9.4% in February 2021 and against 9.1% in January 2021.

The vast majority of economist point out Williams' numbers are "implausibly high", and lead to "easily disproven and absurd conclusions." For instance, you would have to believe that lenders have lost over 90% of their assets to inflation over the last 30 years, and yet have survived just fine. If any business keeps losing money at that rate, it will collapse.