3 ms·

quite the opposite. inflation is good for the working class. Housing prices are generally congruent to salary with interest rates as the coefficient. personall

quite the opposite. inflation is good for the working class. Housing prices are generally congruent to salary with interest rates as the coefficient. personally I see inflation as the innovation dispersion factor - the rate we let the value of innovation disperse throughout the society.

KarlKode 3y ago
Hasn’t the percentage an average person spends on housing significantly increased in the past 50 (or 20) years? Additionally I can’t follow your second thought: are you saying that the inflation rate is directly correlated with the rate of the value of innovation dispersement? E.g. a high inflation should eventually lead to a high dispersion of innovations/a more innovative culture?
- SubjectToChange 3y ago
  Housing costs wouldn’t be on anyone’s radar if they simply grew with inflation.
  - madsbuch 3y ago
    they don't, they have the interest rate as a coefficient. interest rates have reduced signitifanctly over the past 30 years. also, remember that housing is not your San Fransisco condos. it is also the town house at some rural village.
- madsbuch 3y ago
  the idea with the second statement is: the cost of bringing innovation to a market where inflation is higher makes it easier to pay back to cost of the innovation. ie. you pay your salaries at index 100 and get to sell them at a higher index.
ejb999 3y ago
That is such a bizarre statement I have a hard time believing you actually mean it. I think you would be hard pressed to find any/many 'working class' people who enjoy watching the cost of goods and services go up faster than their salaries. The rich benefit from inflation - especially if they have lots of assets like real estate that have increased dramatically in value.
- madsbuch 3y ago
  that is cost inflation. there is also salary inflation, which indeed is a part of the general inflation. inflation is the reason why it makes sense to own you house. please enlighten me on how rich people benefit from (salary-)inflation
  - ejb999 3y ago
    If you are rich and own multiple houses or other expensive assets, they appreciate even faster during times of high inflation…compare that to a young working class couple hoping to someday buy their first house which continually gets farther out of reach…which ones are most hurt by inflation?
    - madsbuch 3y ago
      This sentiment stems from not being able to distinguish types of inflation. In the current environment, cost inflation is not a problem anymore. The reason why the FEDs might not lower the interest rate, is because of salary inflation. So right now you are at advantage working. Houses are flatlining in value due to increased interest rates and you can negotiate better pays with your employer. Also, please avoid straw men like first time buyers etc. These are not really fitting for the debate and only add load the debate emotionally. But to take you on your argument: The situation for young working class couples has generally not changed for decades. (I am Danish, so statistics I know and use are mostly centered around macro dynamics of Denmark, though this is irrelevant for the broader discussion, as the ECB also seeks 2% inflation target)
      - ejb999 3y ago
        >>In the current environment, cost inflation is not a problem anymore. Everyone person who lives paycheck to paycheck, and is barely keeping their head above water as the cost of everything continues to skyrocket disagrees with you. Good luck telling them that "cost inflation is not a problem anymore". I can't speak to how things are in Denmark, but without a doubt the situation for young people (especially those looking to rent or buy a house ) HAS changed dramatically for the worse in the USA.

KarlKode 3y ago

Hasn’t the percentage an average person spends on housing significantly increased in the past 50 (or 20) years? Additionally I can’t follow your second thought: are you saying that the inflation rate is directly correlated with the rate of the value of innovation dispersement? E.g. a high inflation should eventually lead to a high dispersion of innovations/a more innovative culture?

SubjectToChange 3y ago
Housing costs wouldn’t be on anyone’s radar if they simply grew with inflation.
- madsbuch 3y ago
  they don't, they have the interest rate as a coefficient. interest rates have reduced signitifanctly over the past 30 years. also, remember that housing is not your San Fransisco condos. it is also the town house at some rural village.
madsbuch 3y ago
the idea with the second statement is: the cost of bringing innovation to a market where inflation is higher makes it easier to pay back to cost of the innovation. ie. you pay your salaries at index 100 and get to sell them at a higher index.

ejb999 3y ago

That is such a bizarre statement I have a hard time believing you actually mean it. I think you would be hard pressed to find any/many 'working class' people who enjoy watching the cost of goods and services go up faster than their salaries. The rich benefit from inflation - especially if they have lots of assets like real estate that have increased dramatically in value.

madsbuch 3y ago
that is cost inflation. there is also salary inflation, which indeed is a part of the general inflation. inflation is the reason why it makes sense to own you house. please enlighten me on how rich people benefit from (salary-)inflation
- ejb999 3y ago
  If you are rich and own multiple houses or other expensive assets, they appreciate even faster during times of high inflation…compare that to a young working class couple hoping to someday buy their first house which continually gets farther out of reach…which ones are most hurt by inflation?
  - madsbuch 3y ago
    This sentiment stems from not being able to distinguish types of inflation. In the current environment, cost inflation is not a problem anymore. The reason why the FEDs might not lower the interest rate, is because of salary inflation. So right now you are at advantage working. Houses are flatlining in value due to increased interest rates and you can negotiate better pays with your employer. Also, please avoid straw men like first time buyers etc. These are not really fitting for the debate and only add load the debate emotionally. But to take you on your argument: The situation for young working class couples has generally not changed for decades. (I am Danish, so statistics I know and use are mostly centered around macro dynamics of Denmark, though this is irrelevant for the broader discussion, as the ECB also seeks 2% inflation target)
    - ejb999 3y ago
      >>In the current environment, cost inflation is not a problem anymore. Everyone person who lives paycheck to paycheck, and is barely keeping their head above water as the cost of everything continues to skyrocket disagrees with you. Good luck telling them that "cost inflation is not a problem anymore". I can't speak to how things are in Denmark, but without a doubt the situation for young people (especially those looking to rent or buy a house ) HAS changed dramatically for the worse in the USA.