Why can’t conservatives just admit they were wrong about inflation?

[fskimospy]

In an inflationary scenario both price & interest rate go up. The rent on a property mortgaged 20 years ago will be the same as a recently acquired property w/ similar features. Landlords don't charge less just because they can.

You should go look at all the empty storefronts in SoHo and on Bleecker Street and then come back and tell me that acquisition costs don't relate to the rents people charge. Storefronts and new developments there will often sit empty because if they charged what most people are willing to pay they wouldn't be able to meet their ROI targets and would go under.

 

[Jhhnn]

You should go look at all the empty storefronts in SoHo and on Bleecker Street and then come back and tell me that acquisition costs don't relate to the rents people charge. Storefronts and new developments there will often sit empty because if they charged what most people are willing to pay they wouldn't be able to meet their ROI targets and would go under.

You just illustrated the fact that renters don't benefit from inflation.

 

[realibrad]

In an inflationary scenario both price & interest rate go up. The rent on a property mortgaged 20 years ago will be the same as a recently acquired property w/ similar features. Landlords don't charge less just because they can.

I can tell you that renting pre and post 2008 the rent absolutely did go down for me when I was renting. Where I was it went up about $75-100 a year, and after the crash I saw my first renewal go down $50, and no change the next year. So a slight reduction.

 

[fskimospy]

You just illustrated the fact that renters don't benefit from inflation.

No, I didn't, I simply showed you how acquisition costs factor into what rents are charged despite your claims to the contrary. Plenty of other things do as well.

Regardless, this is a distraction from the fact that the data shows very clearly that modestly higher inflation is good for the average person. We should be happy if it's happening.

 

[Jhhnn]

I can tell you that renting pre and post 2008 the rent absolutely did go down for me when I was renting. Where I was it went up about $75-100 a year, and after the crash I saw my first renewal go down $50, and no change the next year. So a slight reduction.

Yes, that was during a time of deflation in housing prices.

 

[Thump553]

I'm no conservative but everything I see is pointed towards at least a near term inflationary trend. Everything I ordinarily purchase (gas, heating oil, electricity, food, a multitude of different types of insurance, etc) has gone up in the last six months and appear to be headed higher. We seem to be repeating the GWB sugar rush economy of approximately 2002, but this time around we are saddled with historically high rates of unsecured debt (credit cards and student loans) and the Trump government has done everything they can to gut both the safety net and statutes/regulations designed to ameliorate the effects of the upcoming crash.

When this crash occurs we are going to have a cash-flush rich class and the rest of us. We are going to have a repeat of the stagflation of the late 1970s and 1980s. IMO the Fed should definitely be taking action now to damp down upcoming inflation, action that will surely invite the ire and red hot tweets from The Donald.

 

[fskimospy]

I'm no conservative but everything I see is pointed towards at least a near term inflationary trend. Everything I ordinarily purchase (gas, heating oil, electricity, food, a multitude of different types of insurance, etc) has gone up in the last six months and appear to be headed higher. We seem to be repeating the GWB sugar rush economy of approximately 2002, but this time around we are saddled with historically high rates of unsecured debt (credit cards and student loans) and the Trump government has done everything they can to gut both the safety net and statutes/regulations designed to ameliorate the effects of the upcoming crash.

When this crash occurs we are going to have a cash-flush rich class and the rest of us. We are going to have a repeat of the stagflation of the late 1970s and 1980s. IMO the Fed should definitely be taking action now to damp down upcoming inflation, action that will surely invite the ire and red hot tweets from The Donald.

Can you tell me where you're getting the data that household unsecured debt is at historically high rates? Total household debt/GDP is substantially below its all time highs but I haven't seen it broken down by secured/unsecured.

 

[Jhhnn]

No, I didn't, I simply showed you how acquisition costs factor into what rents are charged despite your claims to the contrary. Plenty of other things do as well.

Regardless, this is a distraction from the fact that the data shows very clearly that modestly higher inflation is good for the average person. We should be happy if it's happening.

So what? Your contention that inflation benefits renters is incorrect. It benefits debtors. That's often landlords who have mortgaged properties. Their profit is the difference between the mortgage payment/ upkeep and the rent collected.

Inflation very much benefits long term mortgage holders in general whether they live in the property or rent it out.

 

[fskimospy]

So what? Your contention that inflation benefits renters is incorrect. It benefits debtors. That's often landlords who have mortgaged properties. Their profit is the difference between the mortgage payment/ upkeep and the rent collected.

Inflation very much benefits long term mortgage holders in general whether they live in the property or rent it out.

I said inflation leaves renters unaffected or could even benefit them in some cases. That is a very far cry from saying inflation benefits renters as some sort of general rule. Arguing this minute point is pointless.

Inflation benefits debtors in general. Most middle class people and the poor are debtors. Hence, inflation benefits the middle class and the poor. (Within reason)

 

[Thump553]

Can you tell me where you're getting the data that household unsecured debt is at historically high rates? Total household debt/GDP is substantially below its all time highs but I haven't seen it broken down by secured/unsecured.

Credit card debt at record high:
https://www.cnbc.com/2018/01/23/credit-card-debt-hits-record-high.html

Student loan debt at record high:
http://time.com/money/4675552/us-student-debt-record-new-york-fed/

The total amount of student loan debt exceeded total credit card debt within the last few years.

As far as inflation favoring renters, that is assuming wages/income are going up in periods of inflation faster than rents. Since the 1970's middle class income has fallen in real terms (ie, after being adjusted for inflation). For the average Joe in the USA (ie, those without a programming skill in high demand) the person with rising real income after the first few years entering the labor force is a rare bird.

 

[interchange]

Thread should be titled "why can't [people] just admit they were wrong about [anything]?".

 

[fskimospy]

Credit card debt at record high:
https://www.cnbc.com/2018/01/23/credit-card-debt-hits-record-high.html

Student loan debt at record high:
http://time.com/money/4675552/us-student-debt-record-new-york-fed/

The total amount of student loan debt exceeded total credit card debt within the last few years.

These are not adjusted for inflation or GDP growth though so that's misleading. While Q2 2016 isn't the newest data ever it should be clear that in debt/GDP ratios they are not very close at all to record high levels.

As far as inflation favoring renters, that is assuming wages/income are going up in periods of inflation faster than rents. Since the 1970's middle class income has fallen in real terms (ie, after being adjusted for inflation). For the average Joe in the USA (ie, those without a programming skill in high demand) the person with rising real income after the first few years entering the labor force is a rare bird.

That's not accurate. Real median income in the US today is higher than in the 1970's, although not by a ton. (yes, FRED doesn't go back to the 1970's but you can piece it together using several other sources) Real incomes have been stagnant, which is definitely a problem, but they have not declined.

 

[Jhhnn]

These are not adjusted for inflation or GDP growth though so that's misleading. While Q2 2016 isn't the newest data ever it should be clear that in debt/GDP ratios they are not very close at all to record high levels.

That's not accurate. Real median income in the US today is higher than in the 1970's, although not by a ton. (yes, FRED doesn't go back to the 1970's but you can piece it together using several other sources) Real incomes have been stagnant, which is definitely a problem, but they have not declined.

Real income hasn't been stagnant for the 1% or more importantly the top .1%. They've been big winners in the waging of top down class warfare. Their share of national income has basically doubled since 1980. They were wealthy back then & they're even better off today so let's give 'em a big fat tax cut for the trickle down.

 

[fskimospy]

Real income hasn't been stagnant for the 1% or more importantly the top .1%. They've been big winners in the waging of top down class warfare. Their share of national income has basically doubled since 1980. They were wealthy back then & they're even better off today so let's give 'em a big fat tax cut for the trickle down.

No argument there, considering the increase in national wealth and productivity median income should be much higher than it is. Cutting taxes for rich people is about the dumbest policy imaginable in current conditions.