Forum Post: How to control inflation
Posted 12 years ago on Nov. 13, 2012, 11:32 a.m. EST by richardkentgates
(3269)
This content is user submitted and not an official statement
The gap between wages and inflation is a leading causes of instability in a capitalist system. We have minimum wage but that cost gets tacked onto the shelf price and offsets any gains made by increasing wages. We need a formula put into law that dictates markup for retailers and re-sellers and any other applicable industry that applies markup. The formula needs to tie markup to wage averages. By controlling these two factors instead of just the one, we can prevent the gap between inflation and wages from growing out of control. This means restricting profits for execs and shareholders so it will be an uphill fight and even this thread will be challenged by the insiders on this forum that pose as supporters so read their replies carefully because those will be some of the more common attacks on this idea. A successful formula and application of law can also take the control of inflation out of the hands of the Fed and place it into law.
Prices without control
Commodities
CPI + Total Retail Trade (Demand)
Hidden Inflation
One approach I have heard mentioned quite often would be - to tie the maximum ( CEO executive officers etc ) pay to the minimum pay ( minimum pay/wage being a living wage ). But at the same time put a cap on profits so inflation/mark-up would be self defeating if done for purpose of profit. Profit over a certain percentage could be pulled off in a tax - the business could not inflate their way past this profit point - they would just be making larger tax payments. No their personal profit growth would be tied to the lowest wage earner ( as top pay increases so does bottom pay ) but also the volume of sales would need to increase ( they don't make a larger percentage - but the percentage has gained in value ) to increase take home pay. 10% of one million units is larger than 10% of a thousand units.
what's to keep those that produce from just automating out the need for bottom wage earners ?
or
rather wage issue only help people that work for someone
Auto-mating the decline of jobs is already taking place - still someone is still on the bottom of that food chain.
Yep - a living wage will only help those who have a job to live on their earnings - but will also provide more money going into the wide economy due to workers having money to spend rather then having workers looking to community/governmental centers for aid in housing, utilities, medicine/health care, food, transportation, clothing etc etc etc.
Interesting take on taxing the overage but tax loopholes make me question the validity of taxing any overage. I think it would be safer and cleaner to just fine any company for the overage, per item, not per offense. If you have 3,000 items over-priced, you get to pay the fine 3,000 times. The fine could then go toward state or federal budgets(tax).
I like the idea of the penalty for misconduct/theft. Currently fines/penalties are laughed at and considered just another cost of doing business. But if fines/penalties had real teeth - they would actually deter misconduct/crime/theft. Just think if that were applied to the fraud that was committed by wallstreet - a derivative bundle ( toxic ) drawing a fine/penalty based on the number bundled not on the singular bundle. But to do this you have to have active enforcement. Hell they are not even going after the crime committed ( at all ) at this point in time.
1981, sorry.
You can find out why by reading the first paragraph of Executive Order 12333 (1981) which I talk about regularly. The EO places economic policy under national security and thus giving blanket protection to our financial industry. An unfair favoring of the 1% is set by national security, that is why this fight is so hard. It literally is economic warfare, between the US and the world, and now between the US and it's own people.
Funny how the Occupy Wall Street supporters on this forum want nothing to do with a plan to actually reign in wallst and it's methodical siphoning of the nations wealth and subsequent impoverishment of the working class as a result. Proving once again these hacks don't actually support Occupy or the working class but seek to hijack any form of communication between those who seek the change that was promised and not delivered.
1% v 99% is an economic statement. Focus on unemployed professors and soundbites from MSM is you choose.
Economic injustice requires a conversation about economics. Only frauds are on here discussing and entertaining MSM news.
We need standard pre-agreed prices. Not dynamic agreements. Each raw-material commodity would have a specific price-per-unit and then one specific ratio of (cost to price) would be chosen for all finished goods. and all prices would share a pre-agreed supply/demand/price gradient formula. After final decision, no one can charge more than 15% differently from these values.
The agreement would have to involve a direct-democratic vote for each price, the ratio, & the gradient; and statistical average between all votes wins. (Min/max bids + currency-unit lock necessary to avoid corruption/confusion)
Any conflict like this can be resolved. It's never impossible. The common idea in favor of inflation is that you can't pragmatically define monetary value. But you CAN cross-negotiate it once. And set it there.
No more price-raise extortion on necessary/vital goods. No more inflation.
That's my ultimate solution to this particular problem.
Btw this is something we 'wish' corporations would do. The isssue at hand is they don't bc they want to extort us with what we depend on. I am the last of all people to tallk like a capitalist.
Population fluctuates, therefore asset values will fluctuate. So after a while, what is the cost comparison between a loaf of bread and your house? Now that could be funny, if not so tragic.
[Deleted]
???
Inflation is occurred when markets devalue. Markets devalue because of mass-printing. The mass printers continue print money massively to "hold" up our markets without thinking of the end-game consequences. If they do not do this, by their design, the markets crumble.
Want change? End the Fed, institute alternative currencies, open equal trade and promote job creation.
How do we get there? Bitcoin, Mutual Aid, buying and erasing of debt.
occupytheparadigm Don't wait for an angel to save us...let's save us.
Ending the Fed only means the treasury will be doing the dirty work but the printing is supported by the government so why would giving it over to the government make it stop? Answer: it won't. We need to fix more than the banking we need to address retail gouging as just that and penalize it. Don't get me wrong, the Fed needs to go for transparency reasons as well. Bitcoin has no legal standing to be a lagit replacement for the dollar, get real.
develop a list of items you will not buy above a certain price
for example: don't spend more than 20 cents on an egg
Way too simplistic. What we need is an actual formula to calculate what the range should be. Doing it item by item is not feasible.
don't pay more than $4 a pound for any food item
The trend continues and will continue. This is why I hope for a collapse because nothing short will force a rethink. Nothing short will bring a swift end to the bullshit.
Collapse will result in millions of poor people starving to death!
Untold violence, misery, & destitution.
collapse is bad. Let's work (& hope) towards something better.
Peace
Those things are already here. Take off the party colored glasses and take a real good look. You and your lack of ability to see reality is the same thing politicians suffer from. Self created bubbles of delusion. Get off my thread. The only thing you care about is cheer-leading for the Dems, kick rocks.
"already here"? millions are not starving, there is not untold violence. So no that is not happening.
But what you "hope for", collapse would result in that.
Let's hope for something better. Let's work towards improvement without collapse.
I didn't mention party, politics or the dems.. I'm simply denouncing your irresponsible comment that "you hope for collapse"
Thank you
Hunger and Children in America: a Slow and Steady Starvation
Now get off my thread you low life mental midget.
I will not "get off your thread".
Your name calling ("mental midget") betrays the impotence of your position.
Whatever millions are suffering (as a result of your conservative policies) would increase exponentially with the irresponsible hope of collapse you stated.
So my denunciation of your irresponsible comment stands. Collapse would likely mean 30 million dead! Not 15 million "not thriving" as your link presents.
That, sir is what you are hoping for. And that, sir is why I denounce your "hope"!
We just went through a collapse and nobody died as a result, drama queen. You think blaming people on this forum for starvation in this country and all the other things you want to ignore on your parties behalf will make it so? You are just another foot soldier of the corrupt and every word you spew shows it. Even your little "I like puppies" style commentary you throw in every now and then to appear lagit.
Rest assured that people did die in this collapse that wouldn't have died otherwise.
I denounce your carelessness of the poor. Another collapse now would be far worse then the last one you conservatives created.
We need improvement and people hoping, & working for that.
All those not working for improvement should (& will be by me) roundly denounced.
Get with the program!. Onward together, Forward as one, Progressive improvement to avert another conservative policy created collapse!
Your words are as empty as you.
Then not at all!
Nixon tried price controls in the late 60's. It doesn't work. He attempted to fix the problem by treating the symptom, not the cause.
If you want to control inflation, the money supply needs to be controlled. If we keep borrowing and excessively increasing the money supply to pay the debt, inflation will continue to rise excessively.
The real problem with inflation is that it blurs the real value of money. The knowledgeable use it to take advantage of those who don't understand it. That's why the minimum wage is 30% lower today than it was 44 years ago. Most people, even the well educated, don't realize they are getting taken to the cleaners.
Use the inflation calculator below to see if you are being underpaid. Type in your salary from years ago, the year you made it, and the present year to calculate. You might be surprised.
http://146.142.4.24/cgi-bin/cpicalc.pl?cost1=1.00&year1=1968&year2=2012
http://en.wikipedia.org/wiki/File:History_of_US_federal_minimum_wage_increases.svg
http://stateofworkingamerica.org/who-gains/#/?start=1968&end=2008
Price controls just added 8 years to medicaid solvency. The issues with the price controls in the 70s were created by the oil exporters as a political backlash, not lack of profitability. So it is another example where the 1% control the 99% by coercive means. This is not an indictment of price controls but rather an indictment of such practices. When 1,000s are laid off from companies with rising demand and profitability in 2013-2014, you'll know it's retaliation for the ACA. Such practices should be a criminal offense when it can be proven. Punishing the public by economic means to make a political point is nothing short of economic terrorism.
Did you reply to the wrong person?
Shit! My bad. See the revision.
Apparently the vast majority of you who agree with this have no idea about either owning and operating a business or understanding what it takes to "go into business".
It's easy to take from others when it doesn't belong to you - that's the Obama way of thinking - keep thinking that way - wait until Obama care really kicks in and you will see a hugh decline in jobs -
For those of you who disagree with this have no idea what it's like to work 50 hours a week at a labor intensive job and still have your power cut off or not be able to buy clothing for your growing children. You're looking for sympathy in the wrong forum.
Inflation is under 4%. Maybe we should just focus on creating jobs, cutting working class taxes/debt, and raising wages.
and yesterday you said it was 2% and tried to omit fuel, you also refuted food and housing price increases. Try to twist as you may, people can see the shelf prices at the store just fine with or without your doctoring of the facts thank you.
commodities price index graph
I ain't doctoring anything . That's you lying because you can't handle the truth!
Inflation is under 4%! yesterday I said it was between 3- 4%. The articled you offered as evidence corroborated that.
You said it is a hidden inflation. I don't know what you mean. but ifit's invisible maybe it don'r matter.
In any event, More jobs. tax/debt cuts, higher wages is the answer.
Get with the program. Stop chasing invisible things, and playing hide n seek!
what's tax cuts got to do with creating more jobs?
people are employed because of demand
food and gas have been rising faster than 4%
Tax cuts will allow consumers to spend & create the demand you mention.
Gas price increases is a result of greedy, criminal fossil fuel corps!
Food price increases is a result of climate change related extreme weather/drought, along with the fossil fuel criminals above.
Either way inflation is nothing like it has been when I was a young man in the 70's.
So, more jobs. tax/debt cuts, higher wages is the answer.
tax cuts to consumers
a higher wage would give the consumers more money
food prices are based on what we are willing yo pay
Tax cuts to consumers (working/middle class) Yes.
Higher wages would indeed give the same people more money. Agreed
Food prices are based as such. but we must eat and people do not revolt unless the price increase is so large as to create a major burden on most of us.
It just ain't happened yet. I'm not trying to be difficult. If it were really happening people WOULD revolt. THAT is the final mechanism.
Food price increases have very little to do with shortages as you suggest...and have everything to do with the expansion of the money supply....likewise with gas prices. Gas prices are not because of greedy oil companies as many of us, including me, would like to assume. You can buy the same amount of gas for the same amount of gold as you could 100 years ago. Why is that important...because gold can't be inflated...it's a stable currency. Great graphs to show this visually over the last 100 years or so:
http://hmscoop.com/MoneySupplyvsCommodities.html
Gee if only we could go back to the gold standard. Do you think that will happen?.
Y'know there really isn't enough gold to go around. I think a lot of people might be left out or behind.
Does that matter.?
That's a myth....it doesn't matter how much gold there is...or how fast the population would grow. The thing that would make up this difference is cheaper goods and services for people.
There are other methodes for creating a stable currency. Some really interesting currencies starting on the internet....bitcoin is one of them. A currency who's expansion can't be manipulated.
Yes I've read about bitcoin. Sounds great. Let's do it. What's the 1st step.?
Who can I help?
I added a price index graph up top just for you. Argue with the graph.
Here is some more pretty pictures for you.
http://occupywallst.org/forum/how-to-control-inflation/#comment-875710
Reality sets in!
So now I show you the drop in demand, and now the charts are just pretty pictures. Sounds like you're in over your head. Best wishes spin master. I'm sure Obama has plenty of other work for you.
Your new chart shows an historical direction, a dip during Bushes great recession (for retail trade, & inflation) and a resumption of the same historical trend during the recovery (weak as it is).
So what is the point? There is inflation but it is low. That answer is clear and simple.
More jobs, cut taxes/debt for workers, higher wages. Are you against these things?
What are you proposing.?
I am proposing the indexing of retail markup to the national wage average. Did you not read the original post? ADHD much. Slow down, read, and think.
Average? Then areas of high costs of living will be screwed.
Nope. Countries too big. But if you wanna control prices we can do that and take the next step of controlling wages.
And any low life country that passes wage hiles to consumers can be controlled, with your new price/wage control.
Excellent. Well done.
We solved the problem.
We already do control wages. You've proven once again that you are a waste of time and text.
Nah! we have a minimum wage but that isn't wage control.
You don't know what your talkin about. Just like you don't know what high inflation is.
Try again.
Have you done the reading about the economy and inflation during the late 70s like I suggested or are you just satisfied with substituting pomp and fuss for knowledge?
i lived through the 70's. I knew high inflation. high inflation was not my friend, You sir, are not talkin about high inflation.
or maybe 7-10% means so little to you because I was right the first time and you're just speaking from youthful wisdom. Perhaps a college student who has yet to deal with any of the realities you debate with such vigor.
Excuse you but 7-10% higher cost is EXTREME for those living in poverty, which you obviously don't. You seem to be viewing those numbers through the eyes of an upper middle class or corporate exec. Working people damn well think 7-10% inflation is HUGE! As do I, working for crumbs and all. It's all relative and you show your relation well.
Me. Me, Me. You keep talkin about me. You DO NOT KNOW ME. My situation is NOT relevant.
Inflation IS historically low (Sept 2%) notwithstanding your made up pretend 'hidden' number.
The problem is joblessness, high tax/debt, low wages. That is not 'hidden'. that is obvious and what we need to address.
Peace
So now any website that proves you wrong is invalid? Or are you proving my point that you are just being intentionally obstinate and annoying?
Attacking me personally simply betrays the impotence of your arguments.
I'm only using facts and my opinion on the issues. I'm not talking about you. The blog you linked to is an obvious right wing blog. I should pretend? Sorry, It certainly supports your contention regarding the "hidden" inflation but it is clearly partisan.
I didn't say it is invalid, only partisan. And it does not refute my contention!
Inflation IS LOW! Even you "hidden" number is low compared to when inflation WAS high.
The problem is joblessness, high tax/debt, low wages. That is not 'hidden'. that is obvious and what we need to address.
Peace
You said
You're so full of yourself. Real inflation is much much higher. You can repeat the same partly line bullshit all you like but you are no Goebbels and repeating bullshit has made it no more convincing. But I'm starting to think that being annoying is more important to you than the actual debate or facts at all.
Is America Hiding Its True Inflation Rate, and Could the U.S. Be as Insolvent as Greece?
I haven't mentioned party, politics, or candidates.
You on the other hand just linked a conservative blog (policymic) that is clearly partisan.
Inflation is low! The problem is joblessness, high tax/debt, low wages. That is not 'hidden'. that is obvious and what we need to address.
Peace
My problem is that I have shown you a graph that clearly shows a dramatic increase in prices both short and long term in comparison to real demand and wages which are stagnate or falling yet you feel pivoting to 3 months in 1979 invalidates the graph or rising prices. My problem is that your debate practices mirror any and all of the talking heads on MSM when the facts don't match their narrative.
All untrue. I've made only one contention. Current inflation is historically low!
Your graphs corroborate my contention, as do mine. I cannot argue your made up 'hidden inflation' So I accept it but contend it is still historically low!
I offer you the 1970's as evidence of what high inflation actually is. So I offer only facts even when you offer 'hidden' facts.
Inflation is low.
The problem is joblessness, high tax/debt, low wages. That is not 'hidden'. that is obvious and what we need to address.
Peace
Sudden believer in hidden inflation (if it applies to the 1970s)? From 4% back down to 2% in 2012? Peace indeed.
I don't have any belief in your made up "hidden inflation" number. But I thought you might understand better if I used your made up number.
The inflation rate is a matter of record! I sent you the graph that showed this year by month. What is your problem.?
you cannot use the spec for 3 months in 1979 as an average for the 1970s. Misleading is the same as spinning. Your misuse of slang is not working for you by the way, though it is fun to watch you try to adapt.
Who cares about the average. The actual rate in 1979 was almost 14% (hidden 28%). In Sept of 2012 the actual rate was 2% you claim the "hidden rate is 7%"
So actual is better than average.
Peace.
You said
funny that you suggest that we had high inflation in the 70s. It was 7%. But a minute ago you said 7% wasn't a big deal. Which is it?
7% in the '70's? Try almost 14% in 1979. (but the hidden rate was 28% LOL)
I guess you either don't have the honor to admit it or you just don't know what you're talkin about.
lol, no the hell you didn't. I can't imagine you are even out of your 20s.
Your comment would bear out your lack of imagination. But regardless of what you think of me personally. Perhaps YOU studied the '70's and would have enough honor to admit that it was then that we had high inflation.
Perhaps you have chart you can refer to.
still waiting for him to call back
My charts are better than your charts! Nya Nyaa, nya nya, nya
And the dollar is strengthening so that's good right?
Why? Doesn't look like a massive upturn. 175 - 200. What are joking?
inflation is under 4%!!!!
More jobs. tax/debt cuts, higher wages is the answer.
x1.04 increase per year
1.04^10=x1.48 in 10 years
Inflation has been measured the same way for a long time. And it is under 4%.
You like graphs? heres one.
http://en.wikipedia.org/wiki/File:US_Historical_Inflation_Ancient.svg
And another
http://www.tradingeconomics.com/united-states/inflation-cpi
And yet another
http://inflationdata.com/Inflation/Inflation/DecadeInflation.asp
Your inflation is hidden really well.
More jobs. tax/debt cuts, higher wages is the answer.
None of those account for the missing impact of deflation that should occur during a drop in demand, like now. What is the proper rate of deflation for the current low in demand? Figure that out then add it to your reported rate and you have the true rate which is around 7%.
We can increase demand if we:
create jobs, cut tax/debt for working class, and push higher wages.
Time for stimulation!
Done.
Easy Peezy!
Then the industries tack the higher wages onto prices and you're back to square one. Now what?
I disagree!
i mean that's sounds like a good reason NOT to increase wages, And corps have always made those threats but I say fuck 'em. Let's try it!
And be organized enough to boycott any corp that does that.
the government should hire more people directly
the money will have to come from taxing those that have excess
I'm ok with that. I would start with the almost 1 million govt workers fired in the last 2 years by repub state govt.
That would increase consumer spending, demand, and hiring.
I added another chart so you can see the higher prices v lower demand. This means the price index is being artificially manipulated by currency devaluation and not actually justified by supply v demand as should be the case. So the real inflation rate is being hidden because lower demand results in deflation. Calculate the proper deflation rate for the drop in demand and add that to your rate of inflation and you have the true rate of inflation which is around 7%.
Even 7% is not exorbitant but that 7% is from your convoluted equation that seems a little specious.
I am against the concept of currency devaluation generally but this chart shows the dollars value is goin up like you said the other day.
http://www.tradingeconomics.com/united-states/currency
So this is good right? We applaud this no?
The problem is that the value increase will reverse with each printing session by the Fed. Yes, increased dollar value is good. and 7% inflation is catastrophic to our economy, what planet are you from. I suggest some reading about the US economy in the late 70s. Educate yourself young'n.
Aiight then. We're correcting the problem.
Whew! that was close.
Now will you consider more jobs, tax/debt cuts for workers, & higher wages?
Party preaching bores me to tears. I'm going to laugh so fucking hard when these ideas become part of the Dem platform and you're on here pushing for the same shit you now refute. Dumb ass.
You resort to immature name calling because your arguments are too impotent to stand up to honest, civil discourse based in facts?
Yes?
You said that 7% inflation is no big deal and that my idea should include controlling wages, which we already do through minimum wage. I don't think my argument or myself to be the problem so much as your youthful wisdom. Carry on.
Inflation is historically low.
We need jobs, higher wages, and tax/debt cut for workers.
Minimum wage is not wage control. That is nonsense.
yeah....
That's right. it is meaningless! Real control is a lot more involved and would have better results.
money is created mostly by loan contracts
those contracts include loan interest thus money is owed then is present in circulation
The money is being loaned to the banks from the Fed. It's active immediately in this form of QE.
[Deleted]
See above response if you want ti see graphs that show reality.
http://occupywallst.org/forum/how-to-control-inflation/#comment-875710
Your right, we should creating good middle working class jobs instead of service jobs that have dead end wages
Yeah yeah.
Let's see the other shoe your gonna drop.
you're completely correct on this issue we need lower taxes on the middle class to allow them to create business and to be able to raise families
there is no other shoe
Aiiight then!
"leading cause of instability in a capitalist system"
Inflation isn't a product of a capitalist system...it's roots come from very much the opposite system....a government controlled money supply that can be manipulated - while forcing the public to use the devaluing currency. This is about as far from capitalist as you can get.
If competing currencies were legalized inflation would be a thing of the past. You can buy the same amount of gas today with the same amount of gold as you could 100 years ago - the power of a currency that can't be manipulated.
You are hitting on a problem however...and that problem is that inflation is falsly calculated. the equation used to calculate the CPI has been tweeked over the years....tweeked in the governments favor of keeping CPI numbers artificially low (very beneficial for the government as an insane amount of money paid out to the public is computed by CPI numbers). There are people calcuating the CPI with old formulas with much different results. So you're right in the fact that people are getting screwed by inflation - many don't even know what inflation is or how it effects the middle and lower class. Prices of goods are rising out of proportion with wages....this will continue as long as a devaluing currency is forced on the population.
I'm speaking about inflation as defined. Not inflation as described by the Fed or our book cooking government. By controlling wages and markup, you effectively take control of inflation and deflation, and separate those two concepts from the money supply. Having inflation and deflation set by supply on a fiat currency is an absurd contradiction to begin with.
You're trying trying to cure a cold by restricting a runny nose. It doesn't work.
Your analogy is what doesn't work.
How do you cure any disease? By focusing on the cause, not the symptom.
In compliment to your comment:
http://occupywallst.org/forum/on-cancer-and-its-causes-an-open-letter-7302012/
Different type of disease for sure but requiring the same kind of approach.
Yes. Instead of billions fighting cancer, they should fight the cause.
Saw an interesting statistic. Cancer deaths per 100,000 people are about the same now as in 1950. We've made great strides in treating cancer, but the rate of cancer has increased at the same rate as our ability to cure it.
Please refrain from idioms and hyperbole.
It's called common sense.
You have to address the underlying issue. "controlling wages and markup" cannot happen unless the underlying problem of currency manipulation is handled first. If you don't, you'll squeeze certain parts of the economy more than others and wind up with an even bigger problem. In general price controls like you're suggesting lead to disastorous effects in the economy. Historically price controls have led to thousands and thousands of deaths. I agree it sounds good...but like many things in the economy it's counter-intuitive.
Currency manipulation would become a mute point. In a fiat currency system, supply/demand should be the deciding factors of currency value and adding markup controls to the existing wage controls would force just that.
"Markup controls" are price controls...like i said-with price controls you end up squeezing different parts of the economy more than others and wind up with horrible consequences....like dying starving people in the streets.
if prices are linked to wages, prices can only rise when the average income rises.
Of course it will squeeze some parts and not others, namely the wealthy and shareholders who do not actually produce anything. Thats the idea.
prices are based on whatever the people will pay for the product
"what the market will bear" and currency devaluation creates more flow with no change in sales volume and shows artificial demand which artificially justifies higher prices even when real demand doesn't justify it, thus prices are being set beyond whet the market will bear due to the Fed's currency manipulation. Yes, that is the discussion we are having.
"Of course it will squeeze some parts and not others, namely the wealthy and shareholders who do not actually produce anything. Thats the idea."
That's not how it works in an economy unfortunately - there are many examples of price controls in the past - the poor and middle class end up being the ones starving in the streets.
Right exactly. Which is why it's a suggested solution, not a declaration of current mechanisms. Yes, this thread is a suggested solution. It's absurd to use the current mechanisms to compare to the mechanism being suggested because it is not currently a mechanism in use.
Paint shop: Would you like your car painted blue?
You as the customer: My car is not blue.
If you have a stable currency this is all a mute point.....stable currency will actually cause price deflation over time....benefiting the consumer and middle class.
Price controls never will work...period. They are insidious and destroy economies internally....you wind up with massive shortages and surplusses of different goods. Economies are dynamic...not static.
without price controls there can be no stable currency and population growth will not lead to more gold and silver magically appearing out of thin air so fiat currency it is.
must be why every government program utilizes them.
if you are making more than people buy, that is a management problem not an economic one.
and there is nothing in the OP to suggest this is a static solution. Your finishing line has no bearing.
"without price controls there can be no stable currency and population growth will not lead to more gold and silver magically appearing out of thin are so fiat currency it is."
This is a major fallacy in thinking. For why would you need more gold and silver appearing??? That's the beauty of it...you can't create more of it.
"must be why every government program utilizes them."
Give me examples.
"if you are making more than people buy, that is a management problem not an economic one."
Wrong....it is an economic problem. A business will make what it makes according to profitability....not because its trying to supply a good to people for the hell of it.
I'm saying you're thinking about this statically. You're taking a snapshot and saying lets just increase prices at this specific point....but neglecting where the other tradeoffs are in the economy. Any time you artificially mess with an economy in a certain area - there are ripples sent through the system you don't anticipate and end up causing problems in other areas.
This is starting to sound like conservative economic mysticism. Yes dude, if you are producing more than the demand for your product calls for, then your manager is an idiot and should be fired. There is no debating that fact. If you cannot keep up with the demand, fire your damn self or let your competition handle it.
You own a clothing store. Your sales record indicated this month last year you sold 400 pairs of pants. If your manager orders 800, they are not qualified for the job. Their is nothing mystical about it, it's not up for debate.
Examples of price controls can be found in medicaid and medicare. Additional price controls added to those programs in the ACA added about 8 years of solvency. Yeah, real ineffective.
right. Which means with population growth you have infinite deflation until your house is worth $0. DU!
Medicaid - the reason for the price controls was because of governments intervention into the economy in the first place. Guaranteeing health care costs via these programs caused prices to skyrocket because of government guaranteed checks to them. Noble idea, but once again unintended consequences. You're also negating the ripple effects in the economy...which might not yet be majorly obvious, but they will be. Quality of health care will go down because of it (less interest in the private sector because of reduced profit). You're still thinking about it statically.....here's a great paragraph about price controls:
"For over four thousand years, rulers and peoples of every time, place, and culture have attempted to repeal the laws of economics by legislating price controls. Sometimes price controls were imposed on entire economies, while at other times only on certain goods or services such as food, housing, or medical care. Yet in every instance, the imposition of price controls produced harmful results. In some cases, the human suffering caused by a price control experiment was mild or short-lived. Lawmakers need look no further than the 1970s to see the failure of President Nixon’s wage and price controls and the gas lines created by price controls on oil. In other cases, price controls inflicted such colossal damage on the economy that they profoundly changed the course of history. (Having completely undermined their national economies through long-standing price controls, when Soviet and East European communist leaders attempted reform, the entire social and economic structure quickly collapsed beneath them. Yet the contribution of price controls to the collapse of communism, and the resulting dramatic shift in the course of history, is not unprecedented. For example, the decline and collapse of ancient Egyptian civilization in the third century B.C. also resulted in large measure from the prolonged imposition of price controls. For a fascinating, detailed historical examination of price controls, see Forty Centuries of Wage and Price Controls: How Not To Fight Inflation, by Robert L. Schuettinger and Eamonn F. Butler, 1979. Some of the most notable historical examples of price control regimes include the Babylonian experiment in the 21st century B.C., ordained by the Code of Hammurabi, the Roman emperor Diocletian’s comprehensive wage and price control regime (301 A.D.), and the experience of Nazi Germany, 1933 to 1945.)"
1970s oil embargo, find a history book before spouting off about history. The rest I'm sure is just as accurate as anything else you've said.
"In the 1960s, the government again intervened in the energy sector to control prices and production. In 1961, the Federal Power Commission imposed a price ceiling on natural gas at the wellhead for interstate sale of natural gas. In the 1970s, a mandatory allocation program required some petroleum companies to sell their natural gas to pipelines in other parts of the nation at controlled prices. Following the imposition of price controls, the supply of natural gas failed to keep pace with rising demand. The number of natural gas producers dropped from 18,000 in 1956 to 4,000 by 1971. As demand for natural gas outstripped supply in the non-producing states, consumers turned to alternatives such as fuel oil, liquefied gas from Algeria, and synthetic gas. In terms of energy yield, fuel oil on average sold at twice the free market price of natural gas in the 1970s. Some firms relocated to states that produced and sold natural gas at the unregulated price. Both of these responses, i.e., reliance on alternative energy sources and relocation in order to assure a supply of natural gas, involved inefficiency and misallocation of resources. "
" (1970's) the embargo was directly responsible for long gasoline lines and for service stations running dry. The shortages were, in fact, a byproduct of price controls imposed by President Nixon in August 1971, which prevented oil companies from passing on the full cost of imported crude oil to consumers at the pump (small oil companies, however, were exempted from the price control regime in 1973). In the face of increasing world oil prices, "Big Oil" did the only sensible thing: it cut back on imports and stopped selling oil to independent service stations to keep its own franchisees supplied. By May of 1973, five months before the embargo, 1,000 service stations had shut down for lack of fuel and many others had substantially curtailed operations. By June, companies in many parts of the country began limiting the amount of gasoline motorists could purchase per stop. "
"Although price controls on gasoline ended when the Arab embargo was lifted in 1974, the Federal Energy Agency (FEA) continued to maintain price controls on crude oil produced domestically. The price of old oil was controlled at about $5.25 per barrel. New oil from wells put into production after November 1975, plus output from old wells that exceeded the base period output levels, was controlled at a price of about $1 per barrel.
At these controlled prices, shortages emerged for domestically produced oil and refineries relied increasingly on imported oil. Those refiners who had access to old oil had an advantage over refiners forced to pay market prices. The FEA responded with an elaborate system of entitlements and allocations among crude oil refiners. Each refiner was given a certain number of entitlements to domestic oil at controlled prices based on the total purchases of crude oil at uncontrolled prices.
The entitlements program placed a tax on domestic production of crude oil and subsidized refinery purchases of imported oil. The United States, in effect, paid a subsidy of about $3 for every barrel of oil imported. Needless to say, this policy discouraged domestic production of petroleum. By holding petroleum prices below the market price, the entitlements program led to wasteful use of petroleum resources and discouraged the development of alternative energy sources. The market has not solved the energy crisis because the market has not been permitted to operate.[3] "
"This is starting to sound like conservative economic mysticism. Yes dude, if you are producing more than the demand for your product calls for, then your manager is an idiot and should be fired. There is no debating that fact. If you cannot keep up with the demand, fire your damn self or let your competition handle it."
With price controls they usually CEASE making the good.....hence the shortages in the economy. They make stuff based on profits....when the profits go away - so do the products. Either that or the service your price fixing loses quality over time to make up for reduced profits.
"Which means with population growth you have infinite deflation until your house is worth $0. DU!"
If you understood math you would realize that this is impossible....your house would never be worth 0$...mathematically impossible. If you study stable currencies in history (currencies based on the metallic standard), they usually experience very slight inflation....not deflation...which leaves your argument even less valid. You forget that gold is continuously mined also....its expansion is incredibly controlled because of its scarcity...but its expansion does exist to some extent. But that's besides the point....even if it was stable, it there was no expansion....your house would never be worth 0$.
If you don't understand that a finite currency with expanding population leads to deflation, you are definately from the school of conservative economic mysticism in which case there is no point in continuing this debate.
Example:
Your first assessment of a fixed currency
Your final assessment of a fixed currency
The first rule of conservative economic mysticism is there are no rules. Good luck in your education.
You'll see in my second example "currencies based on a metallic standard".....meaning capable of being expanded at a limited rate (the mining of gold/silver). The first example would be a stable currency - one that can't be manipulated at all - aka zero expansion
"If you don't understand that a finite currency with expanding population leads to deflation"
I understand that....you don't understand the mathematics of deflation. So prove your point to me.....say we have just 1 oz of gold in the entire world.....at what population expansion point will your house be worth 0 dollars? Never...even with an infinity expansion of the population....math....go read up on it.
The gold deflation myth is exactly that....a BS myth perpetuated by people who dont' understand math and economics. So say the population expanded 10 times from todays current rate and everything else was equal and we assume the money is portioned out like it is today. How much would your house be worth theoreticall? 10 times less than it is today...what would the population be in the world at that time? 10 times 6 billion....or 60 billion...that's a lot of freaking people in the world...pretty sure resource scarcity is going to be catastrophic at this level....and your house is still nowhere near 0$. This example is also assuming a completely stable currency..one that doesnt expand at all...which isn't gold.
How to control inflation = impeach obama
you got that right !!!!!!!!!!!!.