I was reading that Kamala's handouts (50K small business, 25K first home, etc. etc.) have about 1.7 trillion dollar price tag. Won't this mean creating more inflation and also means the fed will not be able to lower rates substantially? With the fact that outstanding consumer credit is on the rise, I would think this is going to spell a trainwreck for the economy. Thoughts?
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Kamala's 1.7 Trillion in Handouts vs Inflation
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Last: 2 mo ago by YouBet
Her "Opportunity" economy gives everyone the opportunity to have nothing.
Isn't her to economic advisor a music major?
Isn't her to economic advisor a music major?
Bonfire97 said:
I was reading that Kamala's handouts (50K small business, 25K first home, etc. etc.) have about 1.7 trillion dollar price tag. Won't this mean creating more inflation and also means the fed will not be able to lower rates substantially? With the fact that outstanding consumer credit is on the rise, I would think this is going to spell a trainwreck for the economy. Thoughts?
Yes and yes.
While the Harris plan components are certainly inflationary, the Trump plans (principally tariffs) are potentially far more likely to lead to high inflation. Neither candidate has any serious concern about reducing our budget deficit, which has already led to an unsustainable cost for debt service. I weep for future generations.
Since Ronald Reagan or Bill Clinton (both pretty good on economic policy) are not taking over any time soon, we as investors probably need to plan for a continual drag on the economy from deficit spending and higher-than-normal inflation. That's not to mention impending implosion of entitlement programs unless changes are made (which both candidates have firmly turned their back on, repeatedly).
Since Ronald Reagan or Bill Clinton (both pretty good on economic policy) are not taking over any time soon, we as investors probably need to plan for a continual drag on the economy from deficit spending and higher-than-normal inflation. That's not to mention impending implosion of entitlement programs unless changes are made (which both candidates have firmly turned their back on, repeatedly).
I bleed maroon said:
While the Harris plan components are certainly inflationary, the Trump plans (principally tariffs) are potentially far more likely to lead to high inflation. Neither candidate has any serious concern about reducing our budget deficit, which has already led to an unsustainable cost for debt service. I weep for future generations.
Since Ronald Reagan or Bill Clinton (both pretty good on economic policy) are not taking over any time soon, we as investors probably need to plan for a continual drag on the economy from deficit spending and higher-than-normal inflation. That's not to mention impending implosion of entitlement programs unless changes are made (which both candidates have firmly turned their back on, repeatedly).
Harris's plan would lead to inflation and probably support countries outside of the United States at least for a portion of the costs. Trump's plan would lead to inflation, but at least this inflation comes with revenue and is only on non-US goods. The market could shift over time to address the demand. Not in love with his plan, but I can at least see the initial logic.
I'll use a simple example that I just thought of (correct me if any assumptions are invalid). As far as I know, a great majority of clothes washing machines (and dryers) are produced outside the US. Let's say the average cost to consumers is $1000 today (a little high, perhaps, but let's keep the numbers clean-ish).dallasiteinsa02 said:I bleed maroon said:
While the Harris plan components are certainly inflationary, the Trump plans (principally tariffs) are potentially far more likely to lead to high inflation. Neither candidate has any serious concern about reducing our budget deficit, which has already led to an unsustainable cost for debt service. I weep for future generations.
Since Ronald Reagan or Bill Clinton (both pretty good on economic policy) are not taking over any time soon, we as investors probably need to plan for a continual drag on the economy from deficit spending and higher-than-normal inflation. That's not to mention impending implosion of entitlement programs unless changes are made (which both candidates have firmly turned their back on, repeatedly).
Harris's plan would lead to inflation and probably support countries outside of the United States at least for a portion of the costs. Trump's plan would lead to inflation, but at least this inflation comes with revenue and is only on non-US goods. The market could shift over time to address the demand. Not in love with his plan, but I can at least see the initial logic.
Under Harris plan, no direct impact - price to consumers is still $1000.
Under Trump's "tariffs on everything imported" concept/plan: 20% tariff, and cost to consumer is $1200. The $200 tariff is not paid by a Chinese or Korean company, it's paid by the US importer (who is neutral, because they pass the cost on to the consumer). The US government gets the revenue, not Americans or consumers. If it were 100% applied to the national debt, I could warm up to it a bit. BUT, I firmly believe, in this example, that the US companies may not "step up" and produce washing machines until the economics get right for them. That may be $1500 per washer. So, Trump raises the tariff to 50%? The consumer ends up paying for all of this - 50% inflation on washing machines doesn't sound too good to me. A few Americans now have "great new manufacturing jobs", but the vast majority of Americans pay the price. This seems like corporate welfare, instead of letting the market set the price.
Granted, washing machines are not necessarily strategically important, such as semiconductors or airplanes, but pretty much every American "needs" one, and will pay the price.
I prefer not messing with the market for non-essential goods. The Haitians make fine baseballs for Americans - why would we want to onshore that production when it's not in our strategic interest? Making Little Leagues pay 20% more for baseballs is not my way to build an economy, or to halt inflation.
You can't forget that Kamala would simply increase that $1k washer via another way and that would be via absurd green regulations which precedent has already been set by her and Biden.I bleed maroon said:I'll use a simple example that I just thought of (correct me if any assumptions are invalid). As far as I know, a great majority of clothes washing machines (and dryers) are produced outside the US. Let's say the average cost to consumers is $1000 today (a little high, perhaps, but let's keep the numbers clean-ish).dallasiteinsa02 said:I bleed maroon said:
While the Harris plan components are certainly inflationary, the Trump plans (principally tariffs) are potentially far more likely to lead to high inflation. Neither candidate has any serious concern about reducing our budget deficit, which has already led to an unsustainable cost for debt service. I weep for future generations.
Since Ronald Reagan or Bill Clinton (both pretty good on economic policy) are not taking over any time soon, we as investors probably need to plan for a continual drag on the economy from deficit spending and higher-than-normal inflation. That's not to mention impending implosion of entitlement programs unless changes are made (which both candidates have firmly turned their back on, repeatedly).
Harris's plan would lead to inflation and probably support countries outside of the United States at least for a portion of the costs. Trump's plan would lead to inflation, but at least this inflation comes with revenue and is only on non-US goods. The market could shift over time to address the demand. Not in love with his plan, but I can at least see the initial logic.
Under Harris plan, no direct impact - price to consumers is still $1000.
Under Trump's "tariffs on everything imported" concept/plan: 20% tariff, and cost to consumer is $1200. The $200 tariff is not paid by a Chinese or Korean company, it's paid by the US importer (who is neutral, because they pass the cost on to the consumer). The US government gets the revenue, not Americans or consumers. If it were 100% applied to the national debt, I could warm up to it a bit. BUT, I firmly believe, in this example, that the US companies may not "step up" and produce washing machines until the economics get right for them. That may be $1500 per washer. So, Trump raises the tariff to 50%? The consumer ends up paying for all of this - 50% inflation on washing machines doesn't sound too good to me. A few Americans now have "great new manufacturing jobs", but the vast majority of Americans pay the price. This seems like corporate welfare, instead of letting the market set the price.
Granted, washing machines are not necessarily strategically important, such as semiconductors or airplanes, but pretty much every American "needs" one, and will pay the price.
I prefer not messing with the market for non-essential goods. The Haitians make fine baseballs for Americans - why would we want to onshore that production when it's not in our strategic interest? Making Little Leagues pay 20% more for baseballs is not my way to build an economy, or to halt inflation.
So, pick your poison - do you want to pay more because of tariffs or pay more because of unnecessary US regulations?
Neither candidate has really made any coherent economic plan.
Kamala's is a grab bag of giveaways that don't really have a chance to get through a semi-contested Congress, but she'll sign on to whatever crap can make it through. The biggest threat for her is she'll maintain and enhance the already bloated regulatory state.
Trump's tax cuts are unaffordable with the current level of spending and no plan to cut spending that would move the needle. His tariffs are an all together terrible idea though it's difficult for me to understand what would change given Biden has only really added to Trump's tariffs.
Hard for me to get too excited about either candidate's economic policy
Kamala's is a grab bag of giveaways that don't really have a chance to get through a semi-contested Congress, but she'll sign on to whatever crap can make it through. The biggest threat for her is she'll maintain and enhance the already bloated regulatory state.
Trump's tax cuts are unaffordable with the current level of spending and no plan to cut spending that would move the needle. His tariffs are an all together terrible idea though it's difficult for me to understand what would change given Biden has only really added to Trump's tariffs.
Hard for me to get too excited about either candidate's economic policy
What if US producers make the washing machine for $1100? That would make the US product cheaper AND employ more workers driving an INCREASE in production. Higher production is itself anti-inflationary.
won't happen. cost of labor here is too high. Everyone thinks they are entitled to higher pay and want higher minimum wage just because they exist. Not b/c they've done anything to accomplish anything.Ragoo said:
What if US producers make the washing machine for $1100? That would make the US product cheaper AND employ more workers driving an INCREASE in production. Higher production is itself anti-inflationary.
first thing is handouts need to be changed. This is going to have to happen over time and massive education to those living off the gov't that it's going to end. Even then, most won't pay attention and then are gonna suffer big time when the bandaid finally comes off. Then they'll realize taking a job making $12/hour to flip burgers at whataburger isn't so bad and is necessary. Then it'll also force them to choose between 60" tv and 32" and eating out all the time.
second is, we have to eliminate gov't waste. This is a double edged sword. This waste sure does circulate a lot of spend thru the economy but it's in our best interest
and the third I hate to say is we have to raise taxes. Trump's cuts while popular really didn't do anything except add to the deficit.
common sense says the answer is in the middle of what the extreme right (trump) and extreme left (harris) but God forbid the people in power let someone with that type of plan gain traction. It threatens their very control of power. Put those things in place and maybe we start to get a handle on our debt and then can start to invest in things we need...new roads, power supply, teachers, education, etc. Which puts money back into the economy.
Like my teenager looked at us the other day after talking about our grocery bill and he said....."how am I going to be able to afford anything"
I will add the one good thing I've heard from Kamala is trying to help with financing for home builders to help increase supply. IDEALLY that's a loan that's paid back so no loss on money there AND increases supply which drives down price allowing folks to buy within their budget...win win win
all the crooks...I mean politicians on both sides of the isle don't care....they're getting theirs with killer benefits for life....screw everyone else
sorry...rant over
We are in this position because we have been offshoring jobs for 20+ years. We have to bring them back stateside. That isn't debatable.
With a sub 5% unemployment rate, it is very much debatable.Ragoo said:
We are in this position because we have been offshoring jobs for 20+ years. We have to bring them back stateside. That isn't debatable.
If Americans in higher value occupations are going to be the ones to take those jobs, Americans will be poorer. If you want to onshore those jobs and not make Americans poorer, you can always import millions of low skilled laborers (check) and put them to work (not popular, but probably more realistic than deporting everyone) though our regulatory state still makes it more expensive.
then get ready to pay $2100 for the washer. Whatever it is we aren't making here now so gotta start from scratch and that initial investment is HUGE. It's exactly why we export our light crude and import heavy crude b/c plants were built for heavy crude and too expensive to build new for the oil we pull out of US soilRagoo said:
We are in this position because we have been offshoring jobs for 20+ years. We have to bring them back stateside. That isn't debatable.
...land costs are much higher....building costs are much higher....then getting materials/parts requires the same or more investment or is more costly to deliver....then add in labor which is higher than offshore. Even if you utilize all the folks coming across borders it's more expensive. If you want a person born in america to do the job it'll be even moreso b/c they think they are worth more just by being an american with a hearbeat
you'd have to give massive subsidies or tax breaks to make it be almost close to what it costs now. I'd gladly pay more for US made items but even I have my limits and have to put bread on the table at the end of the day. And I know I'm one of the fortunate ones to be able to make such a statement
We export light crude because we produce so much of it. Domestic refineries run both heavy and light crudes. They are designed intentionally to not run just one type of crude so that refiners can play spreads across different cuts of products. You are making the wrong argument here.
Ragoo said:
We are in this position because we have been offshoring jobs for 20+ years. We have to bring them back stateside. That isn't debatable.
Tradeoff is already explained. Yes, we want more Americans to have those jobs, but the tradeoff is that everything will be much more expensive if we do that.
One of the driving forces for globalism was so we could outsource in order to lower costs for everything. As we retreat from that and bring those jobs back, things are going to get more expensive because American workers are obviously not going to settle for second and third world wages.
To offset re-shoring, the American consumer is going to buy less but get higher quality (we hope on the latter). Our consumer driven culture is going to have adjust their mindset. Of course, the politics that are layered on top of all of this makes it that much worse when you have certain administrations layering in unnecessary red tape driven by far left wing politics and mythological weather theories.
I worked for a fabricator 2009-2018. At the start the shop was jammed full and the shop rate was $55/hr. We began offshoring production of the more commodity type products. I went to china and helped set it up. Overtime the shop rate went to $60, $65, $70 just to cover G&A costs. Eventually shops were closed, more production outsourced to third party, and consolidated to try and lower rates and maintain competitive pricing.
What began as a strategy to lower costs to consumers led to the demise of an entire business.
On shoring production likely will cause prices to be higher initially but as production increases, increased production hours more effectively spread out overhead costs and will bring prices down to consumers.
It isn't an overnight solution but one that is necessary to ensure we can get out of this mess.
What began as a strategy to lower costs to consumers led to the demise of an entire business.
On shoring production likely will cause prices to be higher initially but as production increases, increased production hours more effectively spread out overhead costs and will bring prices down to consumers.
It isn't an overnight solution but one that is necessary to ensure we can get out of this mess.
Certainly hope so but I don't think we should be under any illusion that prices for goods are going to match equivalent prices that are outsourced (after factoring inflation).Ragoo said:
I worked for a fabricator 2009-2018. At the start the shop was jammed full and the shop rate was $55/hr. We began offshoring production of the more commodity type products. I went to china and helped set it up. Overtime the shop rate went to $60, $65, $70 just to cover G&A costs. Eventually shops were closed, more production outsourced to third party, and consolidated to try and lower rates and maintain competitive pricing.
What began as a strategy to lower costs to consumers led to the demise of an entire business.
On shoring production likely will cause prices to be higher initially but as production increases, increased production hours more effectively spread out overhead costs and will bring prices down to consumers.
It isn't an overnight solution but one that is necessary to ensure we can get out of this mess.
I just don't see that happening. FTR, I'm good with all of this on and near shoring. I don't mind paying a little more for US made products, but I also know it's going to cost me more.
My wife and I have largely adopted the philosophy of buying fewer things, buying only when we need to (we don't adhere to this all the time, obviously), and buying higher quality when we do.
The money giveaway is like trying to smother the inflation fire with gasoline.
Thanks for all the responses. Great conversation. I agree with some of the comments above, I don't think either candidate is going to be good for inflation. Trump was strong arming Powell to lower interest rates in 2019 way before covid. He also recently made a comment saying "I think I should have some say in interest rates". I guess we all just have to try and be defensive and try to invest in some things that are hedges against inflation. I don't see an end to this. This really sucks for kids just getting out of college and trying to by a house and so forth.
My preferred plan would be something like this:
The Harris and Trump proposals both violate several of these, to the certain potential detriment of our economy.
- Put the American consumer first. Give them freedom to pay the lowest price for the products they need via a broadly free trade oriented policy
- Keep domestic production regulations as minimal as possible, within reason
- Ensure corporate tax rates are at or below main competitors rates (don't put US companies at a competitive disadvantage)
- Use diplomacy where possible to ensure foreign companies are not unfairly subsidizing their companies
- Then, and only then, enact tariffs for unfairly subsidized companies/industries, OR for strategically important industries (by industry, not company, i.e. no corporate welfare or picking winners and losers domestically). This should be a short list made up of semiconductors, aerospace, defense, and similar.
The Harris and Trump proposals both violate several of these, to the certain potential detriment of our economy.
Bonfire97 said:
Thanks for all the responses. Great conversation. I agree with some of the comments above, I don't think either candidate is going to be good for inflation. Trump was strong arming Powell to lower interest rates in 2019 way before covid. He also recently made a comment saying "I think I should have some say in interest rates". I guess we all just have to try and be defensive and try to invest in some things that are hedges against inflation. I don't see an end to this. This really sucks for kids just getting out of college and trying to by a house and so forth.
I think it's important to remember that campaign promises are often just things you say to get votes. So I prefer the candidate who I think is less likely to brute force through their brain dead populist vote grabbing talking points. I would say that's probably Harris, because Trump has repeatedly shown he actually believes in his braindead ideas and basically forces all Republicans in Congress to bend the knee with his brand of populism. Harris will actually have to craft policy with members of both parties and members of her party are much less likely to blindly fall in line. There's never been the kind of rush to prove how loyal and submissive in the Democratic party like the current Republican party. Which makes her worst ideas ($25k down payment assistance, all her cap gains policies) dead on arrival and her best (for example, increasing the child tax credit) will be slow to implement and watered down. If Trump wins I'm sure we'll get half-baked edicts by "truth's" based on what he saw on tv and whatever impulse he felt that day. And then half the government will just automatically be on board and talking about how genius it is. Much more likely that leads to stupid policy.
Gordo14 said:Bonfire97 said:
Thanks for all the responses. Great conversation. I agree with some of the comments above, I don't think either candidate is going to be good for inflation. Trump was strong arming Powell to lower interest rates in 2019 way before covid. He also recently made a comment saying "I think I should have some say in interest rates". I guess we all just have to try and be defensive and try to invest in some things that are hedges against inflation. I don't see an end to this. This really sucks for kids just getting out of college and trying to by a house and so forth.
I think it's important to remember that campaign promises are often just things you say to get votes. So I prefer the candidate who I think is less likely to brute force through their brain dead populist vote grabbing talking points. I would say that's probably Harris, because Trump has repeatedly shown he actually believes in his braindead ideas and basically forces all Republicans in Congress to bend the knee with his brand of populism. Harris will actually have to craft policy with members of both parties and members of her party are much less likely to blindly fall in line. There's never been the kind of rush to prove how loyal and submissive in the Democratic party like the current Republican party. Which makes her worst ideas ($25k down payment assistance, all her cap gains policies) dead on arrival and her best (for example, increasing the child tax credit) will be slow to implement and watered down. If Trump wins I'm sure we'll get half-baked edicts by "truth's" based on what he saw on tv and whatever impulse he felt that day. And then half the government will just automatically be on board and talking about how genius it is. Much more likely that leads to stupid policy.
This simply defies reality. Can't even believe you posted this.
It's truly amazing isn't it? It's almost uncanny how democrats are exactly what they typically describe republicans.
Was obviously up late and the medication he takes for his severe TDS had worn off.YouBet said:Gordo14 said:Bonfire97 said:
Thanks for all the responses. Great conversation. I agree with some of the comments above, I don't think either candidate is going to be good for inflation. Trump was strong arming Powell to lower interest rates in 2019 way before covid. He also recently made a comment saying "I think I should have some say in interest rates". I guess we all just have to try and be defensive and try to invest in some things that are hedges against inflation. I don't see an end to this. This really sucks for kids just getting out of college and trying to by a house and so forth.
I think it's important to remember that campaign promises are often just things you say to get votes. So I prefer the candidate who I think is less likely to brute force through their brain dead populist vote grabbing talking points. I would say that's probably Harris, because Trump has repeatedly shown he actually believes in his braindead ideas and basically forces all Republicans in Congress to bend the knee with his brand of populism. Harris will actually have to craft policy with members of both parties and members of her party are much less likely to blindly fall in line. There's never been the kind of rush to prove how loyal and submissive in the Democratic party like the current Republican party. Which makes her worst ideas ($25k down payment assistance, all her cap gains policies) dead on arrival and her best (for example, increasing the child tax credit) will be slow to implement and watered down. If Trump wins I'm sure we'll get half-baked edicts by "truth's" based on what he saw on tv and whatever impulse he felt that day. And then half the government will just automatically be on board and talking about how genius it is. Much more likely that leads to stupid policy.
This simply defies reality. Can't even believe you posted this.
This is what we get when the two political parties both nominate unqualified imbeciles. The political parties have failed us.
It is the most insane, destructive plan that I could imagine. It is pouring lighter fluid on inflation
All of you shut up! We are going to get free money!!!!! Free lunches!!!!
themissinglink said:With a sub 5% unemployment rate, it is very much debatable.Ragoo said:
We are in this position because we have been offshoring jobs for 20+ years. We have to bring them back stateside. That isn't debatable.
If Americans in higher value occupations are going to be the ones to take those jobs, Americans will be poorer. If you want to onshore those jobs and not make Americans poorer, you can always import millions of low skilled laborers (check) and put them to work (not popular, but probably more realistic than deporting everyone) though our regulatory state still makes it more expensive.
Even worse because Trump will deport the people who might actually want those low wage manufacturing jobs.
No company is going to invest in something that's so fragile. Next president removes tarrifs or adds regulations back. All we'll get is higher costs
evan_aggie said:
All of you shut up! We are going to get free money!!!!! Free lunches!!!!
Kamala Phones to upgrade our Obama phones!
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