Is The Only Way Out Of This Mess Deflation/Depression?

How do we get back to the prices we used to pay? Biden has painted us into a corner where our only options are either continually paying higher prices than we do now or, to get back to the prices we used to pay, we must enter a period of deflation, AKA a depression.

 

You're probably right about that. I'm no economist, but I know this has been building for a long time, many years of poor money managing and deficit spending on a grand scale by both sides of the aisle.

 

Deflation doesn’t mean depression but it very well could cause one. Deflation is scary because it takes incentive away from economic activity. However hyperinflation also does. I am not sure if deflation is necessary to bring things affordable. I believe the economic situation we are in will be a very long term thing we will have to organize to get out of.

 

If we want to get get back to the prices we used to pay the only way to do it is through deflation, which would be almost impossible without going through a depression. Therefore, the powers that be will do their best to grow the economy while trying to lower the inflation rate. In other words, that means they will all be high fiving themselves one year from now if we are paying 4% more for goods and services than we are today. Prices of the past will never be seen again unless we do fall into a depression which could be where we are headed.

 

Dream on, prices will NEVER go back to the 2020 levels. People wishing for a deflation are just wanting the magic tooth fairy to fix everything for them. It's not going to happen. The best we can wish for is for inflation going back to the 2% level the Fed targets. The question is: Can they do it without creating a recession? I am doubtful.

 

Are you asking short-term or long-term?

Short-term is to raise interest rates to curb inflation. We can also decrease the money supply by increasing the required reserve ratios for banks under FDIC, which is pretty much most of them. That in turn will cause a recession when inflation began to fall. And once inflation falls to within normalcy, then the FED can start to make credit more available. The key is for the FED to be more proactive than reactive.

Long-Term would be additional fiscal policy and monetary policy acting together. That is, monetary policy is proactive to constant minute changes in the prime rate and liquidity credit ratios while fiscal policy is long--a term to provide stability in the US economy in terms of labor, supply chain, increased international trade with a reduction in the Trump tariffs, and so forth.

 

Inflation and price increases are not the same thing. Inflation causes prices to rise, but prices don’t always rise because of inflation. Prices can also rise when there’s a shortage of things or when there isn’t a shortage, but there is a high demand for something, even if there is no inflation at all.

So we have to tackle both because we are getting hit by both.

Probably the biggest factor causing price increases is the rise in the cost of oil and gas. The way to turn that around is to produce more, forcing the price down.

And the way to reduce inflation is for the government to stop flooding the economy with unearned money.

If we do those two things, we’ll once again get a handle on our economy. If we don’t, we’re in for a fall.

 

You can curb inflation to zero and we're still paying the high prices we pay today.

 

You can reduce inflation to zero and we're still paying the high prices we're paying today, which Americans can't afford.

 

What's coming next is gonna make this pain look like a mild itch..

 

This is just a front for the New World Order and currency. The DNC is going to destroy the dollar and then claim the only way to save us is to digitize all monetary globally..

Welcome to the ranks of the ever popular Third World..
the dollar will fail - Search (bing.com)

 

Yes. If we reduced the inflation rate to zero we would still have high prices because of the price of oil and gas which affects everything. As a country we have to address the problems of both massive deficit spending and high energy costs.

Inflation robs us of the value of our money, while the high price of gas and oil makes most everything cost more.

When we have both high inflation and high energy costs, we end up in the situation we’re in now.

 

That is impossible. The government has devalued the dollar and the devaluation is permanent. You can only hope that people and wages catch up with the inflation.

We have been paying higher prices since I was born and well before that. That won't change. Government will not allow deflation since it would cause it to have to pay debt with more valuable dollars. Depression is very unlikely. The only hope is that the recession we have already entered will be short lived. Whether that happens or not really depends on the next election. Hope that we can return to congressional gridlock. The less government does, the less harm it creates.

 

Long term, as always. Bad fiscal policies lead to inflation, lead to higher salaries. But the latter takes years to realign with the rate of inflation, and that's the toughest part for we the people.

Very few prices will go down unless federally mandated, which is rare. In fact, the only price I see that goes up and down and back up again continually is the price of fossil fuels. Not just gas at the pump, but heating oil, propane, kerosene, etc.

 

No you can't. Inflation has never been to zero. We average about 3.5% per year over the past 50 years or so. Under Tump it ranged between 2% and 3%. Obama was the same.

 

Why would oil corps lower prices?

 

americans CAN afford any prices as lonf as they receove fair compensation for their labor. if inflation is a problem for you, ask your boss for a raise, or charge more for the goods and services you provide. .

current prices , under capitalism, by definition reflect the current value of currency.

 

There is no policy to get us back to the old prices. We know how to reduce inflation, but it's painful, but reversed it? Nope. Once the damage is done, it's done.

 

Oh Jesus. I was trying to explain that if inflation went down to 0% we would still be paying today's high prices. I realize that inflation will probably not go down to zero. I was making a point. In fact, the point of the thread is that we would have to experience deflation in order to get back to last year's prices. You have to think outside your self imposed box.

 

One of the reasons inflation is out of control now is that wages have been forced up. Your statement is completely false. Every time you raise wages, prices also raise, requiring wages to rise again and again and again in a battle wages will never win.

 

And it is Democrats who did it.

 

Those prices are never coming back.

It's frankly shocking, to find so many people still think this is temporary.

 

Not the point of the post at all.

 

Price controls are bad and historically have never been good. having the government step in to regulate prices naturally also effects supply or availability. I guarantee that if government regulates prices on oil for example, you won’t be able to fill your car everyday for one of a few reasons. Either the pumps will run dry, or they will have limits on quantities you can purchase. I will never… Ever… argue in favor of price controls.

 

Increase the supply of goods and services. Don't think that the current shortages and skyrocketting prices are an accident, they were deliberately engineered. Dems are in the grips of the Degrowth movement, and while they as the privileged gentry expect to live lives of conspicuous consumption and excess they think this is only possible if the "masses" live in want and scarcity.

The coming blackouts. Do NOT say you were not warned.

I have a generator, the fuel for it may cost $7/gallon. In CA they have an answer for the "masses" who would avoid a blackout with a backup generator.

CA bans back up generators.

https://www.kcra.com/article/sale-p...tors-banned-2028-new-california-law/37954497#