Inflation

[Kurt_and_Hunter]

http://krugman.blogs.nytimes.com/2010/03/18/stagflation-versus-hyperinflation/

http://krugman.blogs.nytimes.com/2010/03/18/crying-fire-fire-in-noahs-flood-2/

[DJ13]

1. Why doesnt my pay go as far if theres no inflation?

They need to stop stripping out those categories we cant help but use (food, energy, health care) that would show that our expenses ARE rising.

[peacebird]

2. don't understand the graph, but my food and fuel costs have gone UP not down

and my paycheck has not increased in the past year, so for me it feels like inflation.... My paycheck does not go as far.

[Kurt_and_Hunter]

3. What you describe is real, but we have essentially no inflation

The average person lives in one place for a long time, whether renting or owning.

On the other hand, we buy milk or gasoline every few days. We notice all fluctuations.

Imagine if you bought a house every week.

For renters, if consistently employed, when rents are declining and they move they tend to spend the same money on more/nicer apartment so their $$$ bottom line doesn't go down, but there is no doubt that nationally rents have been in deflation.

And we take it for granted that consumer electronics are cliff-diving deflationary. Plasma TVs are a fraction of what they cost 2-3 years ago. But again, unlike gas we don't buy a big TV every few days.

We have higher prices in a few commodities for reasons that have little to do with the broader economy, but they create an impression. But even taking gasoline, it is not the highest we have seen in the last few years. So it is lower today than it was.

But if it is higher than it was last week or last month we feel it.

These things are high:

Healthcare
Gas/energy
Some foods
Gold

Almost everything else in the world has been flat or gone down over the last few years.

One of our biggest economic problems is the lack of systemic inflation but things like gas prices obscure the fact and facilitate a dangerous political environment.

[Massacure]

4. I never really understood the idea of systemic inflration being a good thing.

Ideally wouldn't it be best if the economy were a zero sum game?