I was agreeing with you. My comment was more about the silliness of the current tax/spending positions of both parties. It’s not sustainable.
Some spending cuts are a good idea, but it’s a drop in the bucket if there is no will to cut military, SS, or medicare spending. Higher taxes are a necessity if those 3 aren’t touched.
Sounds like we need another round of tax cuts for the wealthy to balance the budget.
$90 is total debt. Fed, state, local, household, and business. It’s really scary.
That amount of debt requires a lot of debt service. That is someone or something’s income.the debt is held globally, not just by US nationals.
It’s an indication that we have a system that encourages borrowing at just about any and all instances. That’s a bad system, at least financially. Now toss in THE FACT that no one much cares if that capital is being well placed. The financial system rewards transactions. Who gives a hoot if it’s going to get paid off. Heck, we set records on stock buybacks. That’s not creating any real value. It just manipulates the stock price, dividing the company’s assets into fewer hands. It doesn’t affect anything else. No jobs, no productivity gains. Just debt to transfer wealth into fewer hands. That is debt without any redeeming social or economic value.
The system is broken and we are driving towards the cliff with our collective feet clamped down on the gas pedal. Leverage always adds risk. It’s just a matter of time before the bubble bursts. Debt is also a driver of the money supply. Hence its relevance to any inflation discussion.
That’s why cutting government spending won’t work. It’s more than just government debt.
I am not a fan of neoliberalism. My guess is that era (thanks Reagan/Thatcher) is coming to a close. The transition is gonna leave a mark, sadly. Maybe l will start a whole new thread and we can talk about what comes next, cuz the current economic model is woefully ineffective.
I know that most Americans don’t believe they can learn from the experiences of other countries but the US today is in a similar situation to what Canada was in in 1994. Government debt of all kind then had soared to unmanageable levels and social security was unsustainable: 34% of Federal tax revenue was going towards servicing the national debt.
Major rating agencies had twice downgraded Canadian debt in 1994. In response, the Federal Liberal party dramatically slashed spending, increased taxes and overhauled social security to make it sustainable. It was a painful period but resulted in a balanced budget within a few years.
Unfortunately Canada has followed the US example in recent years with dramatic increases in federal spending and a ballooning deficit. Although our numbers are not as scary as the US, we need to take dramatic action here again. The political will is weaker than it was in 1994/95 though. I would note that the Federal Liberals were re-elected after their 1994/95 draconian budget as they were able to communicate that it was necessary medicine.
As a retiree, the impact of inflation on the basket of goods applicable to me might be very different from other posters. Travel is a major part of my spending and travel inflation (especially international flights, hotels, restaurant meals) seems to be much higher to me than the general rate of inflation?
I am seeing this dramatically in the costs of our pending trip to the UK. I think this is a classic case of supply versus demand as Americans, especially, are descending in massive numbers on Europe this year. This might mean some drop-off in domestic US travel inflation or are more people travelling domestically than usual as well? Canadian domestic airfares this year seem to have reduced.
I thought some UK people here were saying UK inflation was really bad and not really letting up. Might just be the UK.
It is really bad in the hospitality and restaurant industry.
I have never seen hotels/airbnbs and restaurants as expensive as they are now.
We travelled around Denmark and Scotland in July (both trips were 10 days), and the Scotland trip was more expensive (which is crazy when you think about as Denmark is one of the most expensive countries in Europe).
Told my wife that if prices remain the same next year we will not be travelling around the UK. The cost/benefit is basically negative right now. Takes away from the enjoyment of the trip because you spend a lot for little benefit.
Will likely be going to Brazil a few times instead as lots to explore still (and much cheaper).
Yeah, I imagine that after the pandemic there’s quite a lot of pent up demand for travel. I’ve been a bit shocked at airfare.
Americans are everywhere now in Europe.
Its like the floodgates opened. Touristy places are absolutely rammed with them.
This is one of the main issues I have with people discussing the general inflation stat and how it affects them. That “basket of goods” is not MY basket of goods. It’s not anyone’s basket of goods.
I can believe that. I just booked three nights in Edinburgh for late September and was flabbergasted by the hotel cost. It was barely a year ago that my granddaughter and I spent a weekend there and the cost has soared since then.
Yeah, starting in 2021 when people were vaxxed, the demand shot up. And in 2020 the airlines pushed a lot of pilots into early retirement, so the system wasn’t ready. 2022 wasn’t much better, prices were pretty steep - I think I wound up paying about $1,300ea for flights to Athens and it took a lot of shopping to find that fare. Things appeared better this year, when I was browsing flights in the spring. Still feels like prices are up a lot from 2019, but better than 2022.
I was just reading some Reddit posts from Scott Keyes last night, he founded Scott’s Cheap Flights, now called Going. He noted that prices to Asia remain high, but prices to Europe have started easing a bit over the past few quarters or so and he’s finding more deals to the continent now.
Just saw an article that said AA just agreed with their pilots for a 46% pay increase over the next 4 years after UA agreed with theirs for a 40% increase over 4 years.
Prices of some airfares to Europe are ok this year but not the ones we use.
At our advanced ages, my wife and I have decided to splurge and fly Premium Economy, at least on the overnight flight to Europe. We usually fly regular economy on the return flight but try to get exit row seats. The PE costs have soared, possibly because a lot of other aging affluent flyers feel the same way as us. Some business travellers may also be downgrading to PE because of the ridiculous cost of business class on flights to Europe?
Delta also recently enacted a large raise, and my brother is a pilot so I can speak to that one a bit. He said he hadn’t gotten a raise for like three years, so while the headline was ‘30% raise’ or whatever it was (can’t remember the percentage), it’s phased in over several years and it was kind of an overdue raise.
That said, pilot wages are going up, there is a shortage. There’s also a shortage of ATC folks and I don’t know if they are raising wages there.
Which reminds me, the NYT just published the article below that’s… well, it’s interesting. No paywall at the link.
Um, what?
Air traffic control. Is there some naughty meaning of ATC I’m not aware of or something?
I just could not figure it out.
Airline Transportation Center
American Ticketing Company
…
@Mathman is on the Actuarial Translation Committee
I’m here for all of your TLA needs!