Win At Life said:

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All you guys wanting recession are assuming you keep your good paying job throughout the recession. Well, then, sure, why not. But recession means layoffs and chapter 11 for many. Maybe it's been so long since the last REAL recession, that nobody is thinking about losing their job this time.

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Yes, you are right. Before I posted this thread, I was tending towards inflation. I can survive inflation by cutting my expenses. If a recession hits, I might lose my job for no reason at all and then even low inflation would be hard to deal with.

ac04 said:

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fed waited too long to act and we are most likely going to have both at the same time (stagflation) for a while.

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Not to mention the White House potato's $1.3 trillion dollar stimulus package that everyone in the country with a functioning brain knew was unnecessary and was going to be a disaster.

Ragnar Danneskjoldd said:

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Its so bizarre to me that we as a civilization have decided that we should "target" an inflation rate. They rob us blind at a rate 2.5% every year, but when it hits 8.5% we're like "whoa, hem this thing in!". If 2.5% is good for economic growth 8.5% must be spectacular! So many open jobs! Just the money we pay you for those jobs is worth less every year!

And no one at the fed has lost a ****ing job despite the fact they said they never saw it coming. High school dropouts saw it coming, but not the fed chair or yellen.

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Or the bimbo in the White Hiuse that thought a $1.3 trillion stimulus package was a good idea

Jimmy Carter managed both at once, so it isn't an or question necessarily.

infinity ag said:

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I heard over the radio that they are trying to reduce inflation but it may cause a recession. Both are bad (some inflation is not bad and actually necessary).

So what would you choose? High inflation like we currently have or more, or a recession?

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This is wrong. Keynesianism nonsense that many people fall for.

Higher "living wages". Think that may have created inflation ?

When you are paying everyone more, guess who pays for it ?

MouthBQ98 said:

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Jimmy Carter managed both at once, so it isn't an or question necessarily.

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We got Reagan after Jimmy so there's hope….

aTmAg said:

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infinity ag said:

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I heard over the radio that they are trying to reduce inflation but it may cause a recession. Both are bad (some inflation is not bad and actually necessary).

So what would you choose? High inflation like we currently have or more, or a recession?

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This is wrong. Keynesianism nonsense that many people fall for.

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I don't care about Keynes or anyone else or any ideology. Just what I observe.

From what I see, the only way for a society to progress is if the people try to keep aiming for something higher. So if I make 100k, I want to make 110k. So in a healthy society, this happens. So people spend more, which causes prices to go up. So 110k is no longer feeling good, I need to make 120k to feel good. So I work more. And so on.

So working hard causes inflation as above. A small amount is good if wages are in pace with it. If inflation goes up and wages cannot keep pace (for whatever reason), the society is in trouble.

infinity ag said:

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aTmAg said:

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infinity ag said:

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I heard over the radio that they are trying to reduce inflation but it may cause a recession. Both are bad (some inflation is not bad and actually necessary).

So what would you choose? High inflation like we currently have or more, or a recession?

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This is wrong. Keynesianism nonsense that many people fall for.

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I don't care about Keynes or anyone else or any ideology. Just what I observe.

From what I see, the only way for a society to progress is if the people try to keep aiming for something higher. So if I make 100k, I want to make 110k. So in a healthy society, this happens. So people spend more, which causes prices to go up. So 110k is no longer feeling good, I need to make 120k to feel good. So I work more. And so on.

So working hard causes inflation as above. A small amount is good if wages are in pace with it. If inflation goes up and wages cannot keep pace (for whatever reason), the society is in trouble.

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Your observation is too limited. During the industrial revolution we had deflation. And yet we produced the greatest economy the world had ever known.

Inflation is simply an easy way for government to tax us without having to actually go on record raising taxes. The 2% "necessary target" is their bogus economic justification for it. It used to be 2% ceiling, then 2% target average, and now that we have blown past 2%, it will become the 2% floor because the Fed will not push 0% inflation to get the average is back to 2%. So it's just a bogus excuse.

And inflation is not the same as "rising prices". Inflation is "undue expansion of the money supply". Inflation is the cause, not the result. It (possibly) causes high prices.

And to answer your OP question, a recession is necessary. It is not the sickness, it is the cure. The problem was all the reckless activity prior (for decades). Similarly, it took the recession of the early 80s to fix the inflationary problems that started in 71. That recession too was the cure for that sickness. If we didn't want to face a recession down the road, then we shouldn't have enacted those stupid policies. It has been guaranteed ever since.

Somebody was paying attention in ECON classes.

infinity ag said:

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aTmAg said:

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infinity ag said:

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I heard over the radio that they are trying to reduce inflation but it may cause a recession. Both are bad (some inflation is not bad and actually necessary).

So what would you choose? High inflation like we currently have or more, or a recession?

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This is wrong. Keynesianism nonsense that many people fall for.

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I don't care about Keynes or anyone else or any ideology. Just what I observe.

From what I see, the only way for a society to progress is if the people try to keep aiming for something higher. So if I make 100k, I want to make 110k. So in a healthy society, this happens. So people spend more, which causes prices to go up. So 110k is no longer feeling good, I need to make 120k to feel good. So I work more. And so on.

So working hard causes inflation as above. A small amount is good if wages are in pace with it. If inflation goes up and wages cannot keep pace (for whatever reason), the society is in trouble.

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To go along with what atm said-

In a fiat driven currency system the economy is driven by phantom money that exists on paper but not the real world. This exists in all monetary systems but the ration of phantom money to real money in other currency systems is much lower.

In a fiat system, debt and high levels of inflation are the only way the economy can grow.

ATM says that the recession of the 80's was a result of poor monetary policy enacted in 71 and this is true. The bubble creations and bursts we have seen are a direct result of the fiat system.

Because there is nothing tangible backing alot of the "money" in existence, it is much easier to create money with a lag time in regards to inflation.

In a fiat system the money is devalued much more slowly when money is printed out of thin air. This is great when catastrophic circumstances require monetary injection. However what tends to happen is that this solution is used in noncatastrophic circumstances as well and then money just gets pumped and pumped and pumped into the system and few of the negative effects are seen until it is all seen at once.

And yes recession is inevitable at this point.

The only question is how bad it will be.