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I wish the author would have gone into more about the drawbacks of this. Sure it’s easier to get down to target inflation if you move the goalpost but it hurts

I wish the author would have gone into more about the drawbacks of this. Sure it’s easier to get down to target inflation if you move the goalpost but it hurts the majority of people and only helps asset owners.

dangus 3y ago
Doesn’t high inflation help asset owners even more? Their assets rise in value alongside inflation, while the majority of regular people with few assets have to rely on wage increases keeping up with inflation.
- ryanschaefer 3y ago
  The proposed new normal is 2-3% target instead of 1-2%. So yes I agree with you and wish the author of the article would discuss this.
CoreyFieldens 3y ago
The majority of Americans ARE asset owners. That's exactly the kind of behavior that a non-zero inflation wants to encourage. https://www.statista.com/statistics/270034/percentage-of-us-adults-to-have-money-invested-in-the-stock-market/ https://www.statista.com/statistics/270034/percentage-of-us-...
- ryanschaefer 3y ago
  Paywalled, but what I should clarify is income generating assets. If you live on an income inflation is negative vs individuals who mostly gain from assets aren’t affected by it and thus grow their real wealth.
  - clay_the_ripper 3y ago
    This is a personal choice, not economic policy. No one is forcing anyone to become owners of assets, but in practice anyone (even the poor) can become asset owners, as assets can be more than just a home. Putting $30/mo into financial assets is attainable by anyone. Poor financial decision making will always be present, and the idea is to encourage (but not force) people to make rational economic decisions.
    - jononor 3y ago
      25% of American have 0 savings, and 8% do not have health insurance. There is a non trivial amount of people who struggle putting 30 USD/month into financial assets.
      - clay_the_ripper 3y ago
        People who are unable to increase their incomes enough to own assets will always be behind those who can. Is it fair? Not really. Is it a fact? Yes.

dangus 3y ago

Doesn’t high inflation help asset owners even more? Their assets rise in value alongside inflation, while the majority of regular people with few assets have to rely on wage increases keeping up with inflation.

ryanschaefer 3y ago
The proposed new normal is 2-3% target instead of 1-2%. So yes I agree with you and wish the author of the article would discuss this.

CoreyFieldens 3y ago

The majority of Americans ARE asset owners. That's exactly the kind of behavior that a non-zero inflation wants to encourage. https://www.statista.com/statistics/270034/percentage-of-us-adults-to-have-money-invested-in-the-stock-market/ https://www.statista.com/statistics/270034/percentage-of-us-...

ryanschaefer 3y ago
Paywalled, but what I should clarify is income generating assets. If you live on an income inflation is negative vs individuals who mostly gain from assets aren’t affected by it and thus grow their real wealth.
- clay_the_ripper 3y ago
  This is a personal choice, not economic policy. No one is forcing anyone to become owners of assets, but in practice anyone (even the poor) can become asset owners, as assets can be more than just a home. Putting $30/mo into financial assets is attainable by anyone. Poor financial decision making will always be present, and the idea is to encourage (but not force) people to make rational economic decisions.
  - jononor 3y ago
    25% of American have 0 savings, and 8% do not have health insurance. There is a non trivial amount of people who struggle putting 30 USD/month into financial assets.
    - clay_the_ripper 3y ago
      People who are unable to increase their incomes enough to own assets will always be behind those who can. Is it fair? Not really. Is it a fact? Yes.