4 ms·

No offense, but having lived through stagflation in the late 1970's, the current environment is nothing close to stagflation. And from a quantitative point of

by rmah 5y ago

No offense, but having lived through stagflation in the late 1970's, the current environment is nothing close to stagflation. And from a quantitative point of view, there is no decline in real GDP, thus it's not stagflation. It's like seeing a campfire and then warning that it's a clear case of a forest fire. Sure they're both fires (both inflation) but that's about it.

hiram112 5y ago
Are you saying that in the 70s, there was 7-10% real inflation on everything from gas prices to groceries to home prices, yet wages just stagnated (e.g. here's your 1.5% raise for the year!)? Due to exponential growth, that would become brutal after just a few years, and you'd easily notice a diminishing standard of living as most Americans spend close to all of their paychecks on a monthly basis, without much wiggle room. I think that's actually what we've been living through in the US for a while now, though not nearly as high 7% and real inflation has technically been limited to a subset of goods and services. Which means that it's low enough that people don't really notice things getting worse and worse, until they're shocked into realization when buying a large ticket item like a new car or a home, and they see just how much purchasing power they've lost compared to even a decade before.
- matthewdgreen 5y ago
  >until they're shocked into realization when buying a large ticket item like a new car or a home Education and healthcare.
- walkedaway 5y ago
  The late 70s were brutal. Worse than the late 2000s IMHO. It was so bad, that there was a recession in 1983, and the incumbent President that oversaw that recession - Reagan - won the 1984 election by a landslide because it was way better than the stagflation of the 70s. Also, I wish it was as low as 7-10% inflation :( https://www.investopedia.com/articles/economics/08/1970-stagflation.asp https://www.investopedia.com/articles/economics/08/1970-stag...

by rmah 5y ago

hiram112 5y ago

Are you saying that in the 70s, there was 7-10% real inflation on everything from gas prices to groceries to home prices, yet wages just stagnated (e.g. here's your 1.5% raise for the year!)? Due to exponential growth, that would become brutal after just a few years, and you'd easily notice a diminishing standard of living as most Americans spend close to all of their paychecks on a monthly basis, without much wiggle room. I think that's actually what we've been living through in the US for a while now, though not nearly as high 7% and real inflation has technically been limited to a subset of goods and services. Which means that it's low enough that people don't really notice things getting worse and worse, until they're shocked into realization when buying a large ticket item like a new car or a home, and they see just how much purchasing power they've lost compared to even a decade before.

matthewdgreen 5y ago
>until they're shocked into realization when buying a large ticket item like a new car or a home Education and healthcare.
walkedaway 5y ago
The late 70s were brutal. Worse than the late 2000s IMHO. It was so bad, that there was a recession in 1983, and the incumbent President that oversaw that recession - Reagan - won the 1984 election by a landslide because it was way better than the stagflation of the 70s. Also, I wish it was as low as 7-10% inflation :( https://www.investopedia.com/articles/economics/08/1970-stagflation.asp https://www.investopedia.com/articles/economics/08/1970-stag...