Shrinkflation vs Fiscal Responsibility

[West Dundee Hawkeye]

Dems always go on and on about greedy corporations and shrinkflation and blame the corporations. I agree there is shrinkflation but I am blame reckless loose fiscal and monetary policy.

The budget deficit this year is about $2 Trillion. The National Debt was at about $20 Tillion in 2016. Today the National Debt is at $35 Trillion. A gain of $15 Trillion.

While this was going on the Fed added $4 - 5 Trillion to their Balance Sheet by printing money out of thin air and injecting it into the economay as part of Quantitative Easing.

Trump, Biden and Powell the Fed Chairman are all to blame.

That is the $ that created all this extra cash in the system that caused inflation. Dems don't get this. I can't figure out why they have such a hard time with basic econ.

The way to end this is to do what Bill Clinton, Harry Truman and Ike all did. Balance the fricking budget by raising taxes and cutting spending. If taxes go up and spending goes down then people have less $. If people have less $, they spend less $. If people spend less then the greedy corporations have two choices. Either see sales fall or cut prices.

It is that fricking simple!

 

[Huey Grey]

Problem is any bill Congress can come together to craft can be nuked by one phone call by Trump. Hard to get anything done like that.

 

[hawkjt]

Dems always go on and on about greedy corporations and shrinkflation and blame the corporations. I agree there is shrinkflation but I am blame reckless loose fiscal and monetary policy.

The budget deficit this year is about $2 Trillion. The National Debt was at about $20 Tillion in 2016. Today the National Debt is at $35 Trillion. A gain of $15 Trillion.

While this was going on the Fed added $4 - 5 Trillion to their Balance Sheet by printing money out of thin air and injecting it into the economay as part of Quantitative Easing.

Trump, Biden and Powell the Fed Chairman are all to blame.

That is the $ that created all this extra cash in the system that caused inflation. Dems don't get this. I can't figure out why they have such a hard time with basic econ.

The way to end this is to do what Bill Clinton, Harry Truman and Ike all did. Balance the fricking budget by raising taxes and cutting spending. If taxes go up and spending goes down then people have less $. If people have less $, they spend less $. If people spend less then the greedy corporations have two choices. Either see sales fall or cut prices.

It is that fricking simple!

Sorry but it is not simple.
We operate in a capitalist market based economy.
Supply/ demand dynamics largely dictate cost of goods sans monopolies.
The price of eggs skyrocketed due to massive avian flu wiping out tens of millions flock.
Did Biden and the Fed cause the avian flu?
The pandemic disrupted world trade causing extraordinary supply chain problems. When supply dries up, prices go up.
Demand for oil during pandemic went down so much that oil producers saw negative prices... they were paying customers money to take it off their hands because of a lack of storage.
Pandemic ends..economies recover oil demand picks up..prices rebound....boom..inflation.
Did Biden and fed cause the pandemic?

I concede that fiscal spending contributes to inflation but the purpose was to avoid a deep recession which would add far more to debt than stimulus.
The Lions share of our budget is now SS. Medicare , Medicaid and defense along with interest on debt.
Our spending has changed in last 30 years as boomers age out.

In a macro sense we need an influx of young families to avoid the aging problems of japan, China and western Europe.
Immigration is our secret sauce to remain on top.

 

[MitchLL]

Excellent points.

But Republicans have been led to believe "immigration" is a dirty word.

Unless those immigrating are from Norway, Sweden, or Denmark!

 

[Hawk_4shur]

Post ergo propter hoc

It's an absurdly overused strategy in elections. Post hoc ergo propter hoc is a Latin phrase that means "after this, therefore because of this". It's an informal fallacy that occurs when someone assumes that one event caused another simply because the first event happened before the second.

Both parties do it, but I think Trump and his supporters have made it an art form.

Global inflation? Biden's fault
Wars in Ukraine and Israel? Biden's fault
Hurricane destroys a red state? Biden did it.

Biden and his policies did not cause inflation. See @hawkjt post above.

Both parties are to blame for the national debt and huge annual deficits. Neither one is going to do anything about it.

 

[tarheelbybirth]

That is the $ that created all this extra cash in the system that caused inflation. Dems don't get this. I can't figure out why they have such a hard time with basic econ.

So this is what caused world-wide inflation coming out of the pandemic - worse in most other industrialized countries versus the US? It couldn't have been pent-up demand chasing a too small supply? You know - Econ 101?

 

[West Dundee Hawkeye]

So this is what caused world-wide inflation coming out of the pandemic - worse in most other industrialized countries versus the US? It couldn't have been pent-up demand chasing a too small supply? You know - Econ 101?

So the US has added $15 Trillion in Nat Debt since 2016 and another few $ Trillion from the Fed. Where did that money go?

It went to consumption and not savings by the very fact we had to borrow $Trillions.

A large part went to buying imports. This then spreads the $ all over the world causing inflation all over the world.

Remember if savings is increased (read: not borrowing ending budget deficits and paying down debt), then exports go up.

Savings-Investment=Exports-Imports

If you reduce the supply of $, that reduces demand you talked about.

If demand is down, then prices go down, then interest rates go down, then investment goes up. If investment goes up then supply increases.

 

[CarolinaHawkeye]

Excellent points.

But Republicans have been led to believe "immigration" is a dirty word.

Unless those immigrating are from Norway, Sweden, or Denmark!

I personally would like to see more Danes immigrate here.

 

[seminole97]

So this is what caused world-wide inflation coming out of the pandemic - worse in most other industrialized countries versus the US? It couldn't have been pent-up demand chasing a too small supply? You know - Econ 101?

Only if you call printing trillions of dollars ‘pent up demand’.


Central banks around the world played the same game, but without the globe using their currency for international trade to the degree of the USD.

Look at the ECB balance sheet:

Turkish Central Bank Balance Sheet:

and here is the balance sheet at the Fed, where Biden re-appointed Chairman Powell and has supported every bit and more of the federal spending that has occurred and been monetized by the Fed:

Look up the UK balance sheet, going from 719 billion in 2019 to over 1.3 trillion in 2022.

Without other nations clamoring for Turkish lire, British pounds, or even EU euros with the same level of demand as USD, those countries saw their money printing bring even worse inflation.

Make no mistake, the money printing caused the price increases. It does not do so instantaneously, but through progressive transactions over time.

Draining the monetary pool can have the opposite effect

 

[joelbc1]

Dems always go on and on about greedy corporations and shrinkflation and blame the corporations. I agree there is shrinkflation but I am blame reckless loose fiscal and monetary policy.

The budget deficit this year is about $2 Trillion. The National Debt was at about $20 Tillion in 2016. Today the National Debt is at $35 Trillion. A gain of $15 Trillion.

While this was going on the Fed added $4 - 5 Trillion to their Balance Sheet by printing money out of thin air and injecting it into the economay as part of Quantitative Easing.

Trump, Biden and Powell the Fed Chairman are all to blame.

That is the $ that created all this extra cash in the system that caused inflation. Dems don't get this. I can't figure out why they have such a hard time with basic econ.

The way to end this is to do what Bill Clinton, Harry Truman and Ike all did. Balance the fricking budget by raising taxes and cutting spending. If taxes go up and spending goes down then people have less $. If people have less $, they spend less $. If people spend less then the greedy corporations have two choices. Either see sales fall or cut prices.

It is that fricking simple!

We had a fiscally responsible President once, 30 years ago. A Democrat named Clinton. He raised taxes, added “pay-go” and ran balanced budgets several years in a row. Many here credit the GOP\Newt with that success. However the fact remains that 2 years out of office (Bush/GOPs first budget post Clinton), an inflationary tax cut was passed, pay-go was allowed to expire and deficit spending once again became the norm in DC!

 

[West Dundee Hawkeye]

We had a fiscally responsible President once, 30 years ago. A Democrat named Clinton. He raised taxes, added “pay-go” and ran balanced budgets several years in a row. Many here credit the GOP\Newt with that success. However the fact remains that 2 years out of office (Bush/GOPs first budget post Clinton), an inflationary tax cut was passed, pay-go was allowed to expire and deficit spending once again became the norm in DC!

Agree with you 100%. The Clinton years boomed!

 

[seminole97]

We had a fiscally responsible President once, 30 years ago. A Democrat named Clinton. He raised taxes, added “pay-go” and ran balanced budgets several years in a row. Many here credit the GOP\Newt with that success.

The budgets were only ever ‘balanced’ if you think it’s reasonable to ignore the interest expense of the existing debt. Dubious then, and ludicrous now that debt servicing is over 1 trillion dollars. By your logic, the country could add a trillion dollars in debt just to pay debt servicing, but you’d pretend the budget was ‘balanced’.

Debt went up every year of Clinton’s presidency.
Fact.

The spending cuts happened in spite of Clinton, and at the behest of Congress.

The shutdowns didn’t occur because Clinton balked at spending more, they happened because he wanted more spending and Congress refused.

 

[joelbc1]

The budgets were only ever ‘balanced’ if you think it’s reasonable to ignore the interest expense of the existing debt. Dubious then, and ludicrous now that debt servicing is over 1 trillion dollars. By your logic, the country could add a trillion dollars in debt just to pay debt servicing, but you’d pretend the budget was ‘balanced’.

Debt went up every year of Clinton’s presidency.
Fact.

The spending cuts happened in spite of Clinton, and at the behest of Congress.

The shutdowns didn’t occur because Clinton balked at spending more, they happened because he wanted more spending and Congress refused.

“Pay-go” was a Godsend. Clinton was a friggen’ political savant. Clinton did financial things no other politician could have done….or gas come close to doing since. Why doesn’t America go cack to a proven system that worked? Raise taxes, hold spending and adopt a “pay-go” policy for new expenses Congress deems necessary. Make Congress accountable for their spending… just like the Constitution wanted!

 

[West Dundee Hawkeye]

The budgets were only ever ‘balanced’ if you think it’s reasonable to ignore the interest expense of the existing debt. Dubious then, and ludicrous now that debt servicing is over 1 trillion dollars. By your logic, the country could add a trillion dollars in debt just to pay debt servicing, but you’d pretend the budget was ‘balanced’.

Debt went up every year of Clinton’s presidency.
Fact.

The spending cuts happened in spite of Clinton, and at the behest of Congress.

The shutdowns didn’t occur because Clinton balked at spending more, they happened because he wanted more spending and Congress refused.

He had budget surpluses for fiscal years 1998–2001, the only such years from 1970 to 2023. Clinton's final four budgets were balanced budgets with surpluses, beginning with the 1997 budget. The ratio of debt held by the public to GDP, a primary measure of U.S. federal debt, fell from 47.8% in 1993 to 33.6% by 2000.

 

[DooBi]

Excellent points.

But Republicans have been led to believe "immigration" is a dirty word.

Unless those immigrating are from Norway, Sweden, or Denmark!

I dont think I've ever seen even one republican make that distinction. Link?

 

[seminole97]

He had budget surpluses for fiscal years 1998–2001, the only such years from 1970 to 2023. Clinton's final four budgets were balanced budgets with surpluses, beginning with the 1997 budget.

Only if you don’t count interest expense on the existing debt as part of the budget.

Check the Treasury’s website and tell me which FY year(s) the debt didn’t increase:

Debt to the Penny | U.S. Treasury Fiscal Data

Debt to the Penny is the total debt of the U.S. government and is reported daily. It is made up of intragovernmental holdings and debt held by the public.

fiscaldata.treasury.gov

The ratio of debt held by the public to GDP, a primary measure of U.S. federal debt, fell from 47.8% in 1993 to 33.6% by 2000.

Debt ratio did fall, as the Gingrinch House held federal spending growth below the growth rate of the economy. Spending as a share of the economy went to levels similar to our current federal taxation as a share of GDP.

GOP fiscal conservativism died as soon as they had all the levers. I’d love to see Speaker Massey run a normal appropriations process. But the uniparty makes out better this way.

 

[nelly02]

Post ergo propter hoc

It's an absurdly overused strategy in elections. Post hoc ergo propter hoc is a Latin phrase that means "after this, therefore because of this". It's an informal fallacy that occurs when someone assumes that one event caused another simply because the first event happened before the second.

Both parties do it, but I think Trump and his supporters have made it an art form.

Global inflation? Biden's fault
Wars in Ukraine and Israel? Biden's fault
Hurricane destroys a red state? Biden did it.

Biden and his policies did not cause inflation. See @hawkjt post above.

Both parties are to blame for the national debt and huge annual deficits. Neither one is going to do anything about it.

It is true both parties are to blame for the debt but the right is amazing at making it a huge issue when the Dems are in control... and then once Rs are back in control poof we don't hear a peep about the debt until Dems are in control again. And the simpletons just gobble that up. Because they don't have any clue how to actually dig into an issue they just say "huh I always hear about the debt when the Dems are in charge they have to be the problem!"

 

[seminole97]

It is true both parties are to blame for the debt but the right is amazing at making it a huge issue when the Dems are in control... and then once Rs are back in control poof we don't hear a peep about the debt until Dems are in control again.

You’re just saying that the debt isn’t an issue that resonates with Democratic voters.

Why would Dems talk about the deficit when they always want more spending and only want to cut the police?

 

[luvmyhawks]

We had a fiscally responsible President once, 30 years ago. A Democrat named Clinton. He raised taxes, added “pay-go” and ran balanced budgets several years in a row. Many here credit the GOP\Newt with that success. However the fact remains that 2 years out of office (Bush/GOPs first budget post Clinton), an inflationary tax cut was passed, pay-go was allowed to expire and deficit spending once again became the norm in DC!

Ah, the good ol days of a properly functioning government. I miss those days.

 

[seminole97]

Ah, the good ol days of a properly functioning government. I miss those days.

As a result of conflicts between Democratic President Bill Clinton and the Republican Congress over funding for education, the environment, and public health in the 1996 federal budget, the United States federal government shut down from November 14 through November 19, 1995, and from December 16, 1995, to January 6, 1996, for 5 and 21 days, respectively. Republicans also threatened not to raise the debt ceiling.

The first shutdown occurred after Clinton vetoed the spending bill the Republican-controlled Congress sent him, as Clinton opposed the budget cuts favored by Speaker of the House Newt Gingrich and other Republicans.

 

[MitchLL]

I dont think I've ever seen even one republican make that distinction. Link?

The White Nationalist Party????