To fix America’s inflation problem, the Federal Reserve must go big — The odds that a painful recession can be averted look woefully long

  1. The economy isn’t overheating, it contracted due to reductions in labor and supply side energy shocks. Labor force participation is still not back to pre pandemic levels.

  2. However much it takes to stop the inflation. We will know it has succeeded when the inflation is gone. The only question is, will there be an economy left when they are done? This whole thing was purely man made, by creating this free money, the only possible result would be inflation, Why do we let these bureaucrats control the money ? Separate money and state ! These idiots should not be able to build us up and destroy us on a whim, its absurd, and hurts a lot of people, people that they themselves encouraged to invest in the market by keeping rates at 0, only to intentionally destroy, when they decided inflation was 'too high'

  3. To fix America's recession problem the Federal Reserve must go big, and decide it's better to endure price and wage raises instead of price stability mixed with mass unemployment, to the derision of the "Very Serious People".

  4. Except what happens when inflation turns to stagflation? People start losing their jobs and mass unemployment. The US is headed to a recession and either the FED controls the recession or we let it run free and then we have high prices AND unemployment

  5. I agree. There is something perverse about fighting inflation by making everybody poorer!!! In fact, a much better approach would be to flood the market with goods!!

  6. Normal citizens complain when “inflation” increases the price of everything by 10% in a year. Then business owners complain if “recession” reduces the price of everything by 10% in the next year. Business owners should not complain when things just get back to normal.

  7. Normal people complain cuz their wages don’t move but prices do. Wealth has be throughly siphoned from the lower classes to the top and then used to gamify the economy into a glorified casino. The financialization of the economy since the 80’s has been insane. One in 14 Americans works for private equity at this point. Private equity is where you put your money when you’re so rich that you have too much in traditional markets.

  8. Everyone complains when their ox gets gored. The problem with recession is, it tends to actually drive businesses out of business, so it can have long term negative repercussions. A better system would be not to have the inflation in the first place, so no one is hurt by it, citizens or businesses. The state should not have the power to print money, its just a temptation that is too great for corrupt politicians to resist. The only reason the state ever got the power in the first place was that we needed money that was more mobile than gold, and someone had to make sure it wasn't counterfeit, and that was government. Fortunately, technology has fixed this, in 2009, a new money was created that cannot be counterfeited, and since its proven itself in the marketplace for 12 years, maybe its time to actually separate money and state, so they cannot just print more money for every little sniffle in the economy, and prices can be stable.

  9. The way the statistics are gathered has changed a LOT from the 70/80's. I mean, the largest component of the CPLie is owner equivalent rent. Do you pay owner's equivalent rent ? NOONE pays this made up number, but you know what, they actually have real rent numbers, and they are skyrocketing, while the made up number is up like 4 %, and if they put that into the CPI then you would not have such a cooked book, and the numbers would be very comparable to the 70/80's...

  10. When you say they should hike while "watching for indicators," do you mean indicators like rising unemployment, further home price declines and large companies cutting the prices of consumer goods because they aren't selling? That's what is going to show the Fed that their plan is working, and it doesn't leave open very much room for good news.

  11. Allowing immigration and increasing guest workers would help too. Combine that with increasing free trade would help too. Pretty much do the exact opposite of what Trump did who hasn’t got enough blame for the inflation

  12. The lions share of the problem is the amount of money the feds have printed in the last few years. Our production hasn’t risen significantly enough to justify the increase of new money. More dollars equals less value. Less employment equals less production, which equals less value. As a result, everything gets more expensive. If you want inflation to come to a screeching halt, start burning cash. (Don’t actually do that, unless you have $20T to burn).

  13. I mean, the Fed could just sell all the bonds on their books, its not exactly burning cash, but just taking it out of the economy for a few years would probably do wonders for this inflation issue. Why is the Fed even allowed to hold government debt ? This is just a mechanism for essentially printing money, and its long term bad for the economy

  14. See I'm not an economist but I'm just giving an opinion which you all learned people can counter to tell me why my idea isn't feasible or factually wrong

  15. You are correct that the Fed affects the demand wide of the equation, not the supply side. There is a limit to what they can do, and there's also a valid debate about how far they should raise interest rates in response to supply shocks. That said, although it's politically convenient to blame the current inflation on supply shocks, a LARGE portion of the inflation is driven by the massive (global) government responses to covid, including huge deficit spending by congress and also rock-bottom interest rates from the Fed. The Fed is correct to raise rates now, and they're late to the game. To help counteract inflation from the flood of funds from stimulus checks, PPP loans, etc, it would be helpful for congress to move the opposite direction and implement some higher taxes and lower spending, but of course that's politically impossible.

  16. You are right, but the thing is that inflation in the USA is not (mostly) due to a supply side shock. If it were, nominal GDP growth would be average or lower than normal, but the latest data was 9.4%, which is way higher than the 3-4% average.

  17. Or we could establish an expansive welfare state like literally every first world nation except britain(who had one but thatcher got rid of yhe vast majority of it and it sadly hasnt been restored)

  18. I would disagree, if at all, it’s been shown that the feds ability to contain inflation is no more, the feds globally, since the late 90s, have created a liquidity monster that they can no longer control.

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