During and after the passage of the stimulus bill, there was an incessant chant from right-wingers and the mainstream financial analysts* about inflation and the devaluing of the dollar. The birther/teabagger crowd of course glommed onto this meme.
Krugman and others warned that the opposite was true: the stimulus was insufficient to induce demand, and the real danger was deflation.
Now, we’re getting storiesabout the possibility of deflation.
*Of course, it’s not surprising that they would. The American aristocracy’s assets are better off with deflation, since they don’t actually spend much.
Why would it take 3+ years for an economic policy to show up in the economy? If our oil supply is cut off, does it take 3 years for gas prices to rise? If there is a glut of cucumbers this year, will we see a sudden price drop in cucumbers in 2013? When the economy took off and inflation eased in the early 1980s, did economists hail Jimmy Carter as a genius? As I recall, the three-year rule didn’t apply to that situation.
And where were the inflation hawks when George W. Bush stimulated the economy after 9/11? Did the record level deficits of 2002-2008 cause record levels of inflation that I somehow missed?
Funny - I was just running CPI numbers for Southern California this morning. I have a rental contract where we increase the rent based on CPI change year over year, re-run every September.
If your head gets cut off, you die. If you let cancer go untreated, you die. The fact that they both act on the body doesn’t mean they do so on the same time frame.
I don’t see how that’s relevant. What do Dubya or Carter have to do with the rising/falling of the marginal utility of government bonds relative to goods and services going forward? You do realize that it’s possible to be in favor of the stimulus and still concerned about inflation, right?
Don’t right-wingers have faith in the God-Given Free Market ? That Market pronounces its belief in future inflation via bond pricing. At this time, 10-year U.S. Treasury bills are yielding 2.92%, and even the 30-year bond is yielding less than 4%. The “more intelligent commentators” worried about inflation evidently aren’t laughing their way to the bank as bond bears. (Unless the concern about “3+ years from now” is a misprint for “30+ years form now.” )
For comparison, long bonds yielded about 8% during Bush-41 and as much as 15% in 1981.
I don’t really know what right-wingers believe. You’re going to have to ask one.
I could turn around and say that the stock market pronounces its belief in the future earnings and dividends of companies via stock pricing. It was looking great in the fall of 2007 and horrible in March of 2009. Would you argue that it was wise to buy in 2007 and sell in 2009? The yield curve is a dynamic and constantly changing thing. I don’t understand what your point is in pointing out that long bonds are yielding more than short maturities. That’s normal. And who says that a “bond bear” needs to be short Treasuries right now? Definitely not me nor the commentators I referred to above. I’m in the camp that deflation is the more likely short term outcome.
Hey stimulus advocates–where’s the employment, fucktards? According to many proponents of the stimulus, the unemployment figures should be far lower right now.
I don’t claimm to know exactly how the graph was created, but with unemployment above 10%, and only that “low” because people have stoppded looking, while economic indicators are falling almost across the board, and the much-heralded stimulus completely and utterly failed…
I’d like to see some cites for the “we’re worried about inflation 3 years from now.” The right wing commentators keep hyping inflation is just around the corner and deficit spending is going to blow it out.
I think Krugman is right. The stimulus is good but needs to be bigger. Deflation is our big risk and not inflation. Besides, the Fed can jack up rates from effectively zero very quickly and a least put a damper on inflation risks.
Sure, the Fed is biased against inflation risks ever since Volker was king, but the standard economic indicators are not making any serious case for inflation fears at this time nor frankly for the near term.
I know we aren’t in a good place. But economists agree that the stimulus worked and helped us a great deal.
Mind you, the stimulus was lower than most economists wanted. And it contained tax cuts to make the Republicans happy that are less efficient than infrastructure spending.
Unemployment is being slow to recover for a lot of reasons, but one is because as the economy gets stronger, more people who have given up start looking again and re-appear on the unemployment counts. That isn’t to say that things are perfect, but if McCain had won and cut the deficit, shit would be much worse. Republicans are fighting for things that factually do not work because they want their ideology to be proven true.
So, please, try to learn about the issue before you bitch, kay?
Really, it’s all about the $1 double cheeseburgers.
Mickey D’s removed one layer of cheese. and renamed it.
Some Burger Kings are suing 'cause they are required to keep a loss leader as part of their franchise agreement.
Wendy’s still rocks the world with their 2.99 combos.
Real inflation is when you can’t even do the dollar menu 'cause your wheelbarrow of bills were just declared toilet paper by that dickhead Mugabe.
What makes you think McCain would have cut the deficit, or any Repbulican for that matter? They talk big when they’re in opposition, but when they’re elected they might as well be sending the money out in dump trucks.
(Unless the concern about “3+ years from now” is a misprint for “30+ years form now.” 