22% Food Inflation = middle class destruction

[jem]

Imo, its a framework. Economics is rarely susceptible to a simple analysis. The systems being analyzed are very dynamic and influenced by many factors.

In almost every economics arguments one can find a Krugman to argue its not the excessive money spending or money creation that is causing the inflation, its world events or a change in x. So against that concept one needs to consider what the austrian school framework and other framework and see what might really be going on.

 

[jem]

getting back to what I wrote yesterday about out of control govt and inflation and taxation... its seems Breitbart has something to say on the subject today..

http://www.breitbart.com/Big-Government/2014/05/27/How-to-Get-Rich-in-America

here is an excerpt...

The average income of a federal employee at $81,704 exceeds that of his counterpart in the private sector by 60%. Benefits for federal employees’ amount to 39% of income, versus 30% for the average worker; the implication is that government workers make about twice that of their private sector counterparts. That should raise alarm bells among those seeking equality. There has developed a symbiotic relationship between unions representing federal employees and elected politicians. Collectively, unions are the single largest source of campaign funding (almost all of which goes to Democrats); so elected representatives do little to rein-in runaway salaries and benefits negotiated by public sector union leaders.
But the best new way to become rich, without luck or too much effort, is to be elected or appointed to high office. What prompted these musings was an article that appeared in the business section of last Wednesday’s New York Times that spoke to the fact that Ben Bernanke can make in a few hours speaking “to bankers, hedge fund billionaires and leaders of industry” what he made in a year as Chairman of the Federal Reserve, and that “he is following a well-trodden path…” His fees for speaking range from $200,000 in the U.S. to $400,000 in Asia, according to the Times.
The question that immediately comes to mind is why would anyone pay that much money to hear Mr. Bernanke say something he has said before in a public forum? Or will Mr. Bernanke now speak more candidly, making statements he could not have done publically? Perhaps the sponsor feels it is money well spent for the entertainment and publicity value? Maybe the fee is a form of payback from those who benefitted from Mr. Bernanke’s time in office? I hope not. I don’t pretend to know; the fees just seem excessive.
Ex-members of Congress have long morphed into lobbyists, exchanging governance for salesmanship – making introductions and peddling influence instead of formulating policy. We cannot begrudge their desire to fatten their wallets and to own the private planes on which they rode as guests in their previous lives. Nevertheless, cronyism by definition benefits the few at the expense of the many. The proliferation of cronyism is one of the biggest challenges we face and the single biggest argument for Congressional term limits.

 

[Lucrum]

 

[jem]

Last 3 years... economy has pretty much been in recession if you take the FEDS 2 trillion out.
Really, lets cut the leftist crap ... and eliminate income taxes... you have to grow your way out.

http://www.breitbart.com/Big-Govern...my-Shrinks-Despite-2-Trillion-in-Fed-Stimulus

On Thursday, the Commerce Department revised downward its estimate of GDP growth in the first three months of the year. New data reveals the economy shrank by 1.0% in the first quarter, a sharp reversal from the agency's initial estimate of 0.1% growth. The new estimate is the first drop in GDP since the first quarter in 2011. Mostly unreported, however, is the fact that the Federal Reserve has pumped almost $2 trillion into the economy since that economic contraction three years ago.
At the end of 2010, just ahead of the economic contraction at the beginning of 2011, the Federal Reserve announced QE2, its second round of "quantitative easing." In that round of pumping liquidity (read, cash) into the market, the Fed would buy $600 billion worth of US debt. That buying took place in the first 2 quarters of 2011.
Towards the end of 2012, just ahead of the presidential election, the Fed announced QE3, a new round of flooding the market with money. Initially pegged at around $40 billion a month, the Fed soon increased its purchases of securities to $85 billion a month throughout 2013.
In the past couple months, the Fed has begun "tapering," i.e. scaling back, its securities purchasing. Currently, the Fed is injecting around $45 billion a month into the market.
Totally up all of this stimulus, the Fed has pumped somewhere around $1.7 -- $2 trillion into the economy over the last three years. At the end of 2010, current-dollar GDP was $14.6 trillion. The Commerce Department reported Thursday that current-dollar GDP is now $17.1 trillion.
In other words, the Fed stimulus program accounts for almost all growth in economic output for the last three years. Keep in mind, those figures are in "current-dollars," which don't account for inflation since 2010.
Absent the Fed's money-printing machine, there has been no real growth in the economy for the past three years.

 

[jem]

http://www.nationalreview.com/articl...-thomas-sowell


In his 1919 address to Congress, Woodrow Wilson warned that, at some point, “high rates of income and profits taxes discourage energy, remove the incentive to new enterprise, encourage extravagant expenditures, and produce industrial stagnation with consequent unemployment and other attendant evils.”

In a 1962 address to Congress, John F. Kennedy said, “it is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now.”

This was not a new idea. John Maynard Keynes said, back in 1933, that “taxation may be so high as to defeat its object,” that in the long run, a reduction of the tax rate “will run a better chance, than an increase, of balancing the budget.” And Keynes was not on “the far right” either.

 

[Ricter]

This chart was posted re child care, but does show food as a percent of household budget as well.

<img src="http://upw-prod-images.global.ssl.fastly.net/nugget/538cd03126bfd78f8c000037/attachments/1-4787c91f2a3bf08690d34039955e201a.png">

 

[Tsing Tao]

This chart was posted re child care, but does show food as a percent of household budget as well.

<img src="http://upw-prod-images.global.ssl.fastly.net/nugget/538cd03126bfd78f8c000037/attachments/1-4787c91f2a3bf08690d34039955e201a.png">

While interesting, it doesn't mean that food/clothing prices haven't been rising, just that education cost has been rising faster. Given how tuition costs have been insanely rising, this isn't all that surprising.

 

[Ricter]

While interesting, it doesn't mean that food prices haven't been rising, just that education cost has been rising faster. Given how tuition costs have been insanely rising, this isn't all that surprising.

True. I just wanted to post support for the assertion, from other sources, that food as a percent of household budget has been falling for a long time.

 

[Tsing Tao]

True. I just wanted to post support for the assertion, from other sources, that food as a percent of household budget has been falling for a long time.

But that's not a positive, Ricter. The amount of "food insecurity" (SNAP, etc) in the United States has skyrocketed in the same time frame. Families needing assistance and going hungry supports your data (or the other way around, your data supports the food insecurity data).

 

[Ricter]

But that's not a positive, Ricter. The amount of "food insecurity" (SNAP, etc) in the United States has skyrocketed in the same time frame. Families needing assistance and going hungry supports your data (or the other way around, your data supports the food insecurity data).

Re food insecurity I like to keep an eye on the big picture. So long as the land itself produces enough, currency and distribution can be manipulated and no one need go hungry. But, is the land producing enough... ?

http://www.earth-policy.org/indicators/C54