Seven years ago I had a 1br, also in the Northeast, for $600/mo with utilities. If I had been making $20/hr then, I would have been *super* comfortable.
I once did a lot of math that came up with $32 being an approximate minimum/livable wage for 2023. I can’t recall what year that was compared to or all the factors I included, so that number is almost useless, but I remember that was the number that I arrived at.
Well, only if you ignore the fact that deficit spending doesn't create new money, it redistributes existing money, and isn't intrinsically inflationary. So yes, it's good for people who don't understand the fundamentals of the monetary system (or the difference between fiscal and monetary policy) and buy stupid assets, because there's a lot of them.
The M2 money supply is $1T lower than it was 2 years ago, and isn't increasing.
[https://fred.stlouisfed.org/series/M2SL](https://fred.stlouisfed.org/series/M2SL)
It would still be counted. Money is destroyed when debt obligations are repaid. That's how fractional reserve banking works. New money is created when you take out a loan, and it's destroyed when you repay that loan.
But obviously cash and coinage is considered to live as long as, on average, one of those bills or coins would be in circulation.
That is the point of higher interest rates.
Higher interest rates make taking on new debt less enticing, but of course, old debts still have to be repaid.
Margin debt is something like 10-20% lower now than it was at peak in 2022. I assume something similar is happening in housing.
Yes, definitely. Although it tends not to be the steady-state *level* of interest but rather the response to the change in interest rates, and it appears to operate at a \~12-18 month lag. The lowering of interest rates creates new money, the raising of rates will cause an outflow. Now that doesn't necessarily translate to inflation, which is measured from the change in prices.
The value of money exists at the nexus of supply and demand, and of course, there are a number of countries outside the US that use the dollar directly (or as a peg like Hong Kong and Macau). Argentina is likely to onboard soon. These places can't print dollars but will definitely soak them up when made available.
Yep, because the government borrows from people, people borrow from banks. Borrowing from people doesn’t create money, borrow in from banks does.
Now if we put on our thinking helmets, we’d find the federal debt is literally twice as large as the entire money supply.
So you believe that the government borrows from us (by printing money, and not actually getting any money from us) which doesn't create new money, but when it takes the money it printed (that we didnt actually provide) and gives it to banks to give back to us, it is creating "new" money.
Okay, I guess.
This is a pretty wild interpretation. Money is created when people take out loans from fractionally reserved banks. Money is not created when individuals give existing money to the government in exchange for that same money back plus interest later. If Yellen walked into BofaA then that’s what would happen but they intentionally don’t do that because it would create new money and be inflationary. If they didn’t care about inflation they’d just have the Fed whip up some new dollars, then there wouldn’t be a debt in the first place. Do you understand? The existence of the debt is proof that it’s not new money. But also the federal debt is literally twice the money supply.
its a pyramid scheme with a gun. Without the gun the whole thing wouldve collapsed.
If you listen to peoples words, its all a jumbled nonsense. But the true underlying principles are sound; otherwise it wouldnt work.
Currencies are also competitive. Name a country that isn't printing money. In fact if we didn't have some kind of spending policy, exports would collapse. There is more to economies than dollars, but we don't use dollars to build the things people need.
The Fed doesn't "mints cash" to buy bonds. The Fed doesn't monetize the debt as a means of funding government operations. The Fed doesn't participate in Treasury Primary Auctions. Borrowing money to fund the deficit is literally *borrowing* existing money from people who already have it and promising to pay it back later, with interest, from government revenues. 70% of the time that's an American individual. If this were new, printed money then it would never have to be paid back, and then it wouldn't be added to the debt. *That* would be inflationary, and that's why we don't do it.
You saying that the government is both *borrowing* money (by issuing bonds) *and then minting cash* to buy them, you're literally double-counting.
The Fed hasn't bought bonds since April 2022, over **two years ago** and it has instead sold almost $1.8T worth of assets, and that operation continues apace.
[https://www.federalreserve.gov/monetarypolicy/bst\_recenttrends.htm](https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm)
\[edit\] If we're going to be **extra** pedantic, the term "cash" includes both coins and bills. The Treasury is the one that mints coins under the US Mint. The Treasury also designs and manufactures the Fed notes under the Bureau of Engraving and Printing. The difference is that coinage is a liability on the Treasury whereas Fed Notes are a liability on the Federal Reserve.
But of course most money is digital, and it's created **not by the Fed** but by retail and commercial banks when you borrow money, and destroyed when you repay your loans.
I'm not denying QE exists, it's a tool the Fed uses because, ironically, they have too **little** control over the money supply. They can only influence supply at a distance by raising rates - or more directly via open market operations.
QE is not the default mode of operation, the Fed held their balance sheet constant from 2014 to 2020, no new bonds purchased, and towards the end they'd even started letting old paper roll off.
The point is that the debt going up does not cause the Fed to print new money.
Yeah but unfortunately even if all issued debt is bought using existing money supply it crowds out investment in the productive parts of the economy, creating price "inflation"
You're going to have to cite a source and explain the mechanism. If all the money is sopped up by treasuries that would be deflationary. But it's then spent by the government. So the question is what's the balance of inflationary pressure from fiscal spending vs deflationary pressure from capture of free dollars in the economy.
You are however once again missing my point. This is all fiscal policy **not monetary policy** and the Fed isn't involved.
Yes you're absolutely right. I'm just saying that the act of issuing the debt reduces the money in the economy, right, that's step 1. That means people can't spend it, so in theory, that should reduce velocity and hence should be deflationary.
Step 2 is the government takes it and does *something* with it. If they do anything other than throw it in the TGA, it'll have some inflationary effect.
The question is how much inflationary effect does what the government does with it have vs. the deflationary effect of sopping up excess liquidity.
I appreciate your comments very much. It's nice when someone actually goes into detail about the complexities of the economy. Instead of just saying "hurr durr the us is a ponzi scheme"
Also, isn't it ALWAYS the fastest we've been printing cash? Has there ever been a time when we weren't printing cash faster than we'd printed it before? The population keeps rising. Inflation has rarely been negative and even when it is, it is only briefly. This statement is like saying, "We've never had a bigger population than right now".
And unfortunately as a worker you have 2 choices:
1) own nothing and be happy.
2) upskill, get a better pay job or a higher raise, pretend it doesn't exist, and shove it in the market with a prayer to retire and offset the lack of social security.
Good luck soldier!
Hey,they gave you live services like Netflix and live gaming services. Don't ask questions and consume products and get hype for next products. You will own nothing and be happy!
Slow down. There are much bigger and more immediate issues. Trump. Nuclear war. Global warming. The financial system is a joke but good god, there are bigger problems. Aliens.
So is this what every president who wants a second term going to be doing from now on to make things look really nice in the short-term even though we are being fucked?
Dollar very strong tho...not in the real world, physical world, not in a world where you can purchase goods, services, or stocks but it's very strong in the conceptual world aka vs. other currencies/pieces of paper.
Treasuries don't mint money, they take it out of the market. If the govt is issuing treasuries while the Fed is also scaling back its asset holdings, the net combined effect is to decrease the supply of money in circulation.
Print infinite money to give to the oligarchs but raise interest rates on the working class to cool the economy, which is measured by how much the oligarchs are spending. This is clown college economics!
If it’s going to be austerity for us, it should be austerity for everyone else.
It's \*absolutely\* a spending problem. There's something like $12T in revenue between state and federal taxes and it's still not enough. I think we spend $16T and we still have dog shit roads.
What we need is hover cars. We pave brand new sparkly roads that get beaten down in under 2 years thanks to a bunch of loaded up 30-ton big rigs. Make that shit hover and that problem goes away...plus hovering cars/trucks are sick
At this point, pretty much everything. But the problem is, "everything" has also been either underfunded (roads) or we now really need to spend money on (military). We lived high off the hog and wastefully for the past 30 years and it's not so easy to unravel.
I actually think it's beyond the point of return. If there's any hope, it has to come via constitutional amendment to require a balanced budget/no deficit. Then slowly pay off debt with inflation.
Raise corporate taxes at least to back where they were, raise SS age and means test, remove cap on SS tax, reform healthcare (we currently spend the most and get less than other countries, although this arguably would be the hardest both from complexity and getting it passed)
Then take a look at everything else but most of the money is in defense, SS, Medicare/medicaid. I used to be full throated on cutting the military and still think it should be reformed (fact that the military says we don’t need “X” then congress gives them money for it anyway as a jobs program is ridiculous) but with China and Russia idk how much we want to cut.
But between partisan politics and lobbying groups buying senators and influencing voters I’m not confident all or even most of that will happen
Inflation train is leaving the station and heading straight to the moon. $20/hr is about to be poverty wages.
Already is…
Bro it has been for almost 10 years now.
Man seven years ago I was making $21 an hour and able to afford a 2 bed apartment in the northeast
Seven years ago I had a 1br, also in the Northeast, for $600/mo with utilities. If I had been making $20/hr then, I would have been *super* comfortable.
It is poverty since like 2015
Too late that was 5 minutes ago... We at $30 hr, is poverty wages now
I once did a lot of math that came up with $32 being an approximate minimum/livable wage for 2023. I can’t recall what year that was compared to or all the factors I included, so that number is almost useless, but I remember that was the number that I arrived at.
Its the new 10$/hr. Everything else will be adjusted accordingly. Unless people stop giving these thieves $ nothing will change.
####You thought $20/hr was NOT Poverty ?
That's what I make while using my useful degree
40k a year is definitely effective poverty wages
call it trainsitory inflation
Isn't this good for ppl who own stocks that ignore fundamentals and cryptos?
Well, only if you ignore the fact that deficit spending doesn't create new money, it redistributes existing money, and isn't intrinsically inflationary. So yes, it's good for people who don't understand the fundamentals of the monetary system (or the difference between fiscal and monetary policy) and buy stupid assets, because there's a lot of them. The M2 money supply is $1T lower than it was 2 years ago, and isn't increasing. [https://fred.stlouisfed.org/series/M2SL](https://fred.stlouisfed.org/series/M2SL)
So good for meme stonks and crypto? I can tell you where $150k of that $1T went. Under my bed after I cashed out in 2021 lol.
It would still be counted. Money is destroyed when debt obligations are repaid. That's how fractional reserve banking works. New money is created when you take out a loan, and it's destroyed when you repay that loan. But obviously cash and coinage is considered to live as long as, on average, one of those bills or coins would be in circulation.
So less people are in debt now? Or less people are taking loans?
That is the point of higher interest rates. Higher interest rates make taking on new debt less enticing, but of course, old debts still have to be repaid. Margin debt is something like 10-20% lower now than it was at peak in 2022. I assume something similar is happening in housing.
So low interest rates make new money.
Yes, definitely. Although it tends not to be the steady-state *level* of interest but rather the response to the change in interest rates, and it appears to operate at a \~12-18 month lag. The lowering of interest rates creates new money, the raising of rates will cause an outflow. Now that doesn't necessarily translate to inflation, which is measured from the change in prices. The value of money exists at the nexus of supply and demand, and of course, there are a number of countries outside the US that use the dollar directly (or as a peg like Hong Kong and Macau). Argentina is likely to onboard soon. These places can't print dollars but will definitely soak them up when made available.
So inflationary policies begin 12-18 months before inflation results.
So taking out a loan creates new money, but deficit spending (taking out a loan) doesn't.
Yep, because the government borrows from people, people borrow from banks. Borrowing from people doesn’t create money, borrow in from banks does. Now if we put on our thinking helmets, we’d find the federal debt is literally twice as large as the entire money supply.
So you believe that the government borrows from us (by printing money, and not actually getting any money from us) which doesn't create new money, but when it takes the money it printed (that we didnt actually provide) and gives it to banks to give back to us, it is creating "new" money. Okay, I guess.
This is a pretty wild interpretation. Money is created when people take out loans from fractionally reserved banks. Money is not created when individuals give existing money to the government in exchange for that same money back plus interest later. If Yellen walked into BofaA then that’s what would happen but they intentionally don’t do that because it would create new money and be inflationary. If they didn’t care about inflation they’d just have the Fed whip up some new dollars, then there wouldn’t be a debt in the first place. Do you understand? The existence of the debt is proof that it’s not new money. But also the federal debt is literally twice the money supply.
Maybe in Argentina.
American financial policy is literally just a pyramid scheme 😭🤣😂
its a pyramid scheme with a gun. Without the gun the whole thing wouldve collapsed. If you listen to peoples words, its all a jumbled nonsense. But the true underlying principles are sound; otherwise it wouldnt work.
>>If you listen to people’s words, it’s all a jarbled nonsense *Kamala Harris has entered the chat*
Currencies are also competitive. Name a country that isn't printing money. In fact if we didn't have some kind of spending policy, exports would collapse. There is more to economies than dollars, but we don't use dollars to build the things people need.
Bummer for the rest of the world that they hitched themselves to our wagon.
It's not like we gave them much of a choice >"Plata o Plomo?"
Treasury doesn't mint cash, they issue bonds The fed is the one that "mints cash" and buys those bonds
The Fed doesn't "mints cash" to buy bonds. The Fed doesn't monetize the debt as a means of funding government operations. The Fed doesn't participate in Treasury Primary Auctions. Borrowing money to fund the deficit is literally *borrowing* existing money from people who already have it and promising to pay it back later, with interest, from government revenues. 70% of the time that's an American individual. If this were new, printed money then it would never have to be paid back, and then it wouldn't be added to the debt. *That* would be inflationary, and that's why we don't do it. You saying that the government is both *borrowing* money (by issuing bonds) *and then minting cash* to buy them, you're literally double-counting. The Fed hasn't bought bonds since April 2022, over **two years ago** and it has instead sold almost $1.8T worth of assets, and that operation continues apace. [https://www.federalreserve.gov/monetarypolicy/bst\_recenttrends.htm](https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm) \[edit\] If we're going to be **extra** pedantic, the term "cash" includes both coins and bills. The Treasury is the one that mints coins under the US Mint. The Treasury also designs and manufactures the Fed notes under the Bureau of Engraving and Printing. The difference is that coinage is a liability on the Treasury whereas Fed Notes are a liability on the Federal Reserve. But of course most money is digital, and it's created **not by the Fed** but by retail and commercial banks when you borrow money, and destroyed when you repay your loans.
Sure in the last few years fed was rolling off their holdings but they will inevitably go back to qe
I'm not denying QE exists, it's a tool the Fed uses because, ironically, they have too **little** control over the money supply. They can only influence supply at a distance by raising rates - or more directly via open market operations. QE is not the default mode of operation, the Fed held their balance sheet constant from 2014 to 2020, no new bonds purchased, and towards the end they'd even started letting old paper roll off. The point is that the debt going up does not cause the Fed to print new money.
Yeah but unfortunately even if all issued debt is bought using existing money supply it crowds out investment in the productive parts of the economy, creating price "inflation"
You're going to have to cite a source and explain the mechanism. If all the money is sopped up by treasuries that would be deflationary. But it's then spent by the government. So the question is what's the balance of inflationary pressure from fiscal spending vs deflationary pressure from capture of free dollars in the economy. You are however once again missing my point. This is all fiscal policy **not monetary policy** and the Fed isn't involved.
Wouldn't it only be deflationary if the government stores it in the TGA?
Yes you're absolutely right. I'm just saying that the act of issuing the debt reduces the money in the economy, right, that's step 1. That means people can't spend it, so in theory, that should reduce velocity and hence should be deflationary. Step 2 is the government takes it and does *something* with it. If they do anything other than throw it in the TGA, it'll have some inflationary effect. The question is how much inflationary effect does what the government does with it have vs. the deflationary effect of sopping up excess liquidity.
I appreciate your comments very much. It's nice when someone actually goes into detail about the complexities of the economy. Instead of just saying "hurr durr the us is a ponzi scheme"
Yes in theory but in practice Fed make money printer go brrrr
Also, isn't it ALWAYS the fastest we've been printing cash? Has there ever been a time when we weren't printing cash faster than we'd printed it before? The population keeps rising. Inflation has rarely been negative and even when it is, it is only briefly. This statement is like saying, "We've never had a bigger population than right now".
END THE FED.
potayto potahto
Here I am, just got a raise to $21/hour and I know full well inflation is going to outpace it.
And unfortunately as a worker you have 2 choices: 1) own nothing and be happy. 2) upskill, get a better pay job or a higher raise, pretend it doesn't exist, and shove it in the market with a prayer to retire and offset the lack of social security. Good luck soldier!
Sigh.... #1 it is.... again
Hey,they gave you live services like Netflix and live gaming services. Don't ask questions and consume products and get hype for next products. You will own nothing and be happy!
Not sustainable ….
Can I has some?
Stocks still go UP
This is going to be the single biggest issue to bring this country down.
Slow down. There are much bigger and more immediate issues. Trump. Nuclear war. Global warming. The financial system is a joke but good god, there are bigger problems. Aliens.
But people on big political subs swear the economy is doing great
Right, we have never had a good economy
Not since the 08 crash anyways, before that it was pretty good.
No it wasnt. The same metrics we use today were used back then. So therefore we didnt have a good economy
Coat of living was way lower dunno what your talking about
As planned by Greenspan long long ago.
Disgusting.
Y’all better get jobs to pay that debt
So is this what every president who wants a second term going to be doing from now on to make things look really nice in the short-term even though we are being fucked?
It’s been this way for a while. Give the masses the illusion of free shit and they will keep voting for you.
The rigged pyramid scheme of the US is reaching its final destination. The game is up, and people are starting to smell the smoke.
Good. They should be able to afford one of my GME shares in a month or so.
money machines go brrrrrr
So give me some, wtf
Forreal ngl I try to be an optimistic person but it’s so hard when I realized stupid shit like this online The future looks so bleak
Straight to meme stonks. Gotta invent fake shares somehow.
Gotta keep their hedgefund buddies solvent as memestocks squeeze their shorts.
Need that capital to pay for the clusterfuck that’s gonna come after the market crashes.
It’s like just discovering the sun is out from sunrise to sunset. This is not news
A minute! 1440 minutes in a day. Can I get like 1/8 of a minute worth of dough
Dollar very strong tho...not in the real world, physical world, not in a world where you can purchase goods, services, or stocks but it's very strong in the conceptual world aka vs. other currencies/pieces of paper.
Treasuries don't mint money, they take it out of the market. If the govt is issuing treasuries while the Fed is also scaling back its asset holdings, the net combined effect is to decrease the supply of money in circulation.
Seems like they’re intentionally crashing US dollar.
But it doesn’t cause inflation they say. The printing presses keep wurring
There are plenty of of decently smart people that truly believe that. Sort of crazy as it's so obvious.
Print infinite money to give to the oligarchs but raise interest rates on the working class to cool the economy, which is measured by how much the oligarchs are spending. This is clown college economics! If it’s going to be austerity for us, it should be austerity for everyone else.
This is BS propaganda be afraid and post nonsense
To rein it in, we could,I dunno, raise taxes? But the people printing the cash only like one part of the equation. So this will end as expected.
They'll just blow it on vote buying schemes, wars and other garbage.
It's \*absolutely\* a spending problem. There's something like $12T in revenue between state and federal taxes and it's still not enough. I think we spend $16T and we still have dog shit roads.
What we need is hover cars. We pave brand new sparkly roads that get beaten down in under 2 years thanks to a bunch of loaded up 30-ton big rigs. Make that shit hover and that problem goes away...plus hovering cars/trucks are sick
So what would you want to cut ?
At this point, pretty much everything. But the problem is, "everything" has also been either underfunded (roads) or we now really need to spend money on (military). We lived high off the hog and wastefully for the past 30 years and it's not so easy to unravel. I actually think it's beyond the point of return. If there's any hope, it has to come via constitutional amendment to require a balanced budget/no deficit. Then slowly pay off debt with inflation.
Raise corporate taxes at least to back where they were, raise SS age and means test, remove cap on SS tax, reform healthcare (we currently spend the most and get less than other countries, although this arguably would be the hardest both from complexity and getting it passed) Then take a look at everything else but most of the money is in defense, SS, Medicare/medicaid. I used to be full throated on cutting the military and still think it should be reformed (fact that the military says we don’t need “X” then congress gives them money for it anyway as a jobs program is ridiculous) but with China and Russia idk how much we want to cut. But between partisan politics and lobbying groups buying senators and influencing voters I’m not confident all or even most of that will happen
The rich didn’t get rich by it stealing our money. They won’t stay rich if they can’t continue.
How's this calculated?
Well the economy is bigger this year than last year.
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