The understanding of most people in this thread of economics is way over my head but on a visceral level celebrating inflation and constantly trusting the future to be better than the past seems misguided. Whether it's worked or not up until now isn't so relevant.
If by "pay the bill" you mean something really abstract.... When we had an oil shortage that lead to 3 years of inflation in 1979 (aka the 80s) Volcker raised rates and the bottom 20% suffered huge losses and never recovered. I guess they "paid the bill". Missing I think in your quasi real world example, missing in most of the complaints, is treating the stimulus/unemployment etc as an outside windfall but treating the wages/investment/inflation as the "inside" calculation. Your wages may have gone up 3% but you might have had subsidized unemployment for a year that was 200% your wages (I got 3x my income in late 2020/early 2021). We already explored the fixed income example above.Everybody says that printing trillions of dollars causes inflation, but in the 2008 Crash, we printed trillions of dollars into existence, but inflation did not occur. Deflation did. So I had to rethink what causes inflation and arrived at a new theory:
Inflation is caused by genies. Some central bankers around the world are cautious. Others have been rubbing the bottle for years. Suddenly the Inflation Genie has appeared!
I wish my debt problems will go away.
I thought the answer to this question depends on where the individual is on the economic scale. If you work for a wage that went up 3% this year, but your rent went up 10% and your food went up 15% and general inflation is running 7.5%, then obviously you are getting poorer. If inflation is running 7.5% but you have investments that made 27.5%, then you got a lot richer and the inflation is just a number.
In my opinion, as clear minded as indicated in the first two paragraphs of this post, there is a bill (to pay for the COVID shutdown) that needs to be paid somehow, but it is being passed around.
Inflation is running 7.5% and workers want a raise. They have some bargaining power, so they get it. Their employers are just going to pass the costs down to their customers.
So the line above keeps repeating in a spiral.
I think the last time we had a wage-price spiral was in the 1980's and it ended when we were able to force one party to pay the bill. I think we are in another wage-price spiral and it will continue until one party is forced to pay the bill.
Feel free to pick apart my theories! This discussion is intended as an exercise in education.
I don't think anyone is really is really celebrating inflation, more just saying the solutions to the inflation itself are worse than the inflation itself.
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Amartya Sen in Development as Freedom talks about unequal demand side inflation and its roles in famine. You can cause consumer goods inflation by giving to the top. Not so much in the USA, except maybe graphics cards, but there is historical precedent in the capitalist world.You can't really 'celebrate inflation' until you figure out the main victims of the inflation.
I do think that we underplay how inflation and wage-inflation don't coordinate very nicely for the working people (and businesses) at the bottom. When someone says "the people who don't like it", chances are they're failing to notice the people for whom it's truly painful. Especially if we're triggering inflation by giving more money to the people at the top.
Like, that 7.5% inflation is after we've recalculated after re-balancing our basket of goods. And that's done one transaction at a time by a person who's struggling, for whom math isn't easy, and is finding out that their previous basket of goods is unaffordable. Inflation generated by putting in money at the bottom is a different type of pain as you sudden find out that your inferiors are able to compete with you on your purchases, and you have to decide between savings and stuff (
I am not convinced. Petrol is still undervalued, even at the UK price of ~ $8-50/Gal. Wheat has gone up to ~$12/bushel (64 pints) from about $8 before this crisis. One bushel of wheat is ~65 million calories I think, so I make that only 12 cents for the wheat if you lived off wheat (2 million calories a day), or an increase of 4 cents. Is this 12 cents the problem? Fertiliser has gone up, but so has the price of what fertiliser makes (wheat for example) so where is the problem there?
If this is WW3 then I think we have other worries than inflation.
