When I see sub 40 percent approval rate for both parties in congress… we’ve almost reached the moment where a majority of people believe both democrats and republicans have a negative view yet the 3rd parties will remain elusive due to gerrymandering districts.
vcryan · 8h ago
Yes, I have absolute disdain for both parties.
cameldrv · 2h ago
This is because very few people have even an extremely rough understanding of the difficulties our nation (and world) are facing. This is an very difficult situation for a democracy. When people are confused about important matters, the most reassuring thing is to be told that there is a fairly simple and understandable solution, and that they should just let the adults get in there and solve it. People will always vote for people who say these things. The reality is that we've gotten ourselves into knots upon knots upon knots.
danaris · 7h ago
Third parties are nonviable in most of the US due to our voting system.
In order to make it mathematically possible for a third party to compete, we need to switch to something with more nuance than single vote, first-past-the-post winner-take-all elections. Ranked Choice Voting has some momentum right now, and AFAICT is no worse than any of the other options (they all fail in certain edge cases, I believe; it's just a matter of which ones).
SOLAR_FIELDS · 7h ago
RCV also has the advantage of being relatively understandable for the layperson unlike some of the more esoteric ones I’ve seen
jus3sixty · 11h ago
Const economy = [
“People living check to check”,
“Landlords living month to month”,
“Corporations living bailout to bailout”,
“Governments living war to war”
];
Esophagus4 · 11h ago
I’m nervous Trump seems to be pushing so hard for rate cuts given this reality of what seems like uneasy inflation.
That will likely benefit hard assets like real estate and those with big stock portfolios, as top blue chips generally have some pricing power to offset increased cost, but I think real income will drop and you’ll get all sorts of weird second order consequences.
If I had enough confidence in it, an interesting bet might be borrowing to invest in big tech blue chips. You’re betting that Trump gets his way with the Fed politically, tech benefits from low rates, tech has power to raise prices, and that Trump will inflate away your debt.
Won’t be good for most Americans, but if you can’t beat em, join em?
{not financial advice}
bradleyjg · 9h ago
The Fed only controls the overnight rate, the shortest term rate. If it loses its reputation for independence we may well see higher long term rates even if they cut the overnight rate to zero. That would be quite bad for real estate.
The next step if that happened could well be the puppetized Fed expanding the balance sheet to buy long term bonds. That would probably be bad for everything. Except perhaps gold.
NewJazz · 10h ago
Debt is usually one of the best hedges against inflation. Instead of buying stocks on margin, though, people usually buy more price inelastic assets like homes.
Esophagus4 · 10h ago
Yeah, I’ve just never really liked the carry costs of a house… taxes, maintenance, utilities, transaction costs, etc. and never wanted to deal with being a landlord.
Plus, while the real estate market on a whole might go up, I have a hunch the chances of one individual house appreciating are more varied than the chances of one of the big tech stocks appreciating… as they are the market at this point.
Edit to add: I think for the average American, real estate is the only plausible way to invest on margin, as you’ll never get 5:1 leverage at your brokerage, if you even have a brokerage.
ajross · 9h ago
That's because the median person qualifies for a vastly larger mortgage than margin limit.
Margin trading is for the already-wealthy. You can get a home with near-zero assets.
hiddencost · 10h ago
Relatively benefit. Everyone will be poorer in real terms but they'll lose less quality of life.
pavlov · 11h ago
This year both inflation and unemployment are going up, so it’s only getting worse.
deepsun · 11h ago
And debt is going up as well.
estearum · 11h ago
On the plus side so is energy costs
msandford · 11h ago
I can't wrap my head around anyone being happy about this who isn't extremely rich. Would love to understand.
teachrdan · 10h ago
I believe that comment was meant to be sarcastic.
themafia · 11h ago
Which would all be fine if wages were being adjusted at the same rate inflation is. The American worker class and the ownership class drift further and further apart.
tzs · 9h ago
At least /r/leopardsatemyface has plenty of material.
taneq · 8h ago
At this stage you might be concerned that everyone's just having too much of a good time, but rest assured, they aren't.
throwawaymaths · 10h ago
opec just announced production hikes
nickthegreek · 11h ago
i got bad news about health insurance costs…
esseph · 10h ago
I'm hearing higher than 25%+ all-in...
newfriend · 10h ago
Inflation is lower than it was at the beginning of the year. Which means inflation is actually going down this year.
Retric · 9h ago
We don’t have accurate data for most of 2025. The second half of 2024 was much better than the first half of 2024 which is really helping those year long moving averages, but the monthly inflation numbers have been increasing recently so it’s far to early to say what 2024 vs 2025 will actually look like.
chrisco255 · 9h ago
Yes we do, price data is very reliable on a monthly basis:
Employment figures are different and have had lots of problems in recent years.
Retric · 9h ago
You linked CPI for July which covers 7 out of 12 months. However, pricing data isn’t quite inflation data as that includes housing data which is sampled every 6 months.
Now if you’re happy comparing 12 month CPI averages ending in July then sure 2025’s July was 0.2% lower than 2024’s July. But I’m assuming you’re talking Jan-Dec 2024 which we have vs Jan-Dec 2025 which IMO is to early to call.
chrisco255 · 5h ago
Not only is 7 out of 12 months most of 2025, but a 12 or 13 month rolling average is generally fine to see trends and it's completely arbitrary as to whether you are observing July-June or Jan-Dec. Try looking at the economy from a Chinese or Hebrew calendar perspective. Does it really matter as long as you have a years worth of data including all seasons? No.
Retric · 5h ago
7 out of 12 for CPI is not 7 out of 12 for inflation. Also, 7 out of 12 may be a majority of X but it’s not “most of” X.
> Does it really matter as long as you have a years worth of data including all seasons?
Using the correct words for something makes a big difference for communication. After jumping through all these hoops we understand what we each mean at this point, but it definitely didn’t need to take this much back and forth.
toasterlovin · 10h ago
Tariffs are just starting to work their way inoto consumer prices now.
chrisco255 · 9h ago
Tariffs are deflationary, actually. They are a form of taxation and act to inhibit demand.
Anyways inflation is actually declining and is well below 2022 levels.
> They are a form of taxation and act to inhibit demand.
They also are a price increase. Whether that winds up being inflationary or deflationary depends on how much that price change impacts demand, which will likely vary from good to good.
chrisco255 · 5h ago
Tariffs go from the economy to the U.S. treasury, who ultimately issues the currency. That is, it's removing funds from private bank accounts to the US government balance sheet, reducing the deficit and the money supply at the same time.
Inflation is everywhere and always a monetary (or money supply) phenomenon.
Reposting my original claim:
Tariffs are deflationary, actually. They are a form of taxation and act to inhibit demand.
Inflation is actually declining and is well below 2022 levels.
Do people in the U.S. have a good understanding of the causes of inflation?
kattagarian · 11h ago
This is something being debated across the world. I'm not american and in my country economists wages war over the "inflation is the result of monetary expansion". I know nothing about it, the only thing i know is that inflation is getting worse (almost) everywhere.
OgsyedIE · 11h ago
Not even most economists do, by analogy to how opaque the questions of lifting bodies and rayleigh scattering are to physicists.
taneq · 8h ago
The money goes faster on the top side of the wing, which means the money underneath the wing is more compressed, lifting up both sides of the wing. This is known as the "trickle-down" theory of lift.
Eddy_Viscosity2 · 11h ago
Yeah no, economists and a lot of people understand the the causes of inflation. There are economists who are paid very well to not understand it though, and such positions are often high in the government and financial sector hierarchies.
chrisco255 · 9h ago
Are these the same Fed economists that claimed the elevated inflation levels were transitory in 2021?
There are multiple schools of thought on causes of inflation, but generally I agree with late Milton Friedman that it is "everywhere and always a monetary phenomenon". Money supply expansion growing faster than GDP expansion causes inflation.
ceejayoz · 9h ago
> Are these the same Fed economists that claimed the elevated inflation levels were transitory in 2021?
But… that was correct? It went up, then back down, due to a very unusual (almost unique, thus far) external cause.
>> elevated inflation levels were transitory in 2021But…
> that was correct?
No, it wasn't correct. By "transitory" the Fed meant "no need to do anything, inflation will go down on its own". It didn't go down on it's own, and the Fed had to act, too little too late, which is now causing prolonged inflation problems.
> It went up, then back down, due to a very unusual (almost unique, thus far) external cause.
The cause wasn't external, neither unusual nor unique, it was the Fed's start of interest rate increases, precisely at the time the inflation trend reversed.
chrisco255 · 5h ago
It went down after they hiked rates in late 2022 (which causes a drawdown in money supply). The asset bubble that occurred in 2021 would have been avoided if they hiked rates in response to inflation data then instead of holding rates at near zero. Had they held rates at zero, it's likely the inflation would have continued.
opo · 5h ago
The economist Noah Smith graded the predictions of economists who made public statements once the Biden administration started its large spending programs:
>...In 2021, Krugman tweeted: "I like it and plan to steal it. This report does look like what you'd expect if recent inflation was about transitory disruptions, not stagflation redux".
As Smith pointed out:
>...But in late 2021, inflation spread to become very broad-based. Services inflation was always significant, and took over from goods inflation as the main contributor in 2022.
>The notion that this was just some transient supply-chain disruptions that was only affecting specific products was absolutely central to Team Transitory’s claims in the summer of 2021. And that was incorrect.
>...Team Transitory also called the end of the inflation at least a year and a half too soon.
On October 13, 2021 Krugman tweeted "Three month core inflation. Why isn't everyone calling this a victory for team transitory"
>...So they didn’t entirely whiff here. They just greatly overstated their case. And their complacency in 2021 probably fed into the Fed’s decision to delay the start of rate hikes until 2022, which in retrospect looks like a serious mistake.
What did get vindicated was mainstream economics as taught in our textbooks.
As Smith wrote:
>...Mainstream macro’s first victory was in predicting that the inflation would happen in the first place. In February 2021, Olivier Blanchard used a very simple “output gap” model to predict that Biden’s Covid relief bill would raise demand by enough to show up in the inflation numbers. His prediction came true. He didn’t get everything right — he thought wages would rise more than consumer prices, and he neglected the lagged effects of Trump’s Covid relief packages and Fed lending programs. But his standard simple mainstream model got the basic prediction right when most people made the opposite prediction, and this deserves recognition.
>More importantly, mainstream macro appears to have gotten policy right.
If prices rise because of supply and demand, that's not inflation but something else?
chrisco255 · 5h ago
Yeah assuming money supply is flat or near flat, supply and demand will influence prices in one market or another in relation to the market as a whole, or you may have temporary periods of inflation followed by periods of deflation as we saw in the 1800s.
No really, transonic flow and turbulence are less complicated than what's really going on underneath the quantity theory of money. If it was easy there would be fewer economists.
ajross · 9h ago
The only people certain about economics are the kind of folks who run around on HN talking about "printing money". Too lazy to look up your post history to see which camp you belong in.
But no, macroeconomics is understood from sound general principles, but it is not a robust predictive theory. The analogy upthread to Navier-Stokes is apt.
No comments yet
dennis_jeeves2 · 11h ago
No.
To me the answer is very simple, the primary (not sole) driver is govt printing currency indiscriminately.
bryanlarsen · 10h ago
We've had a dozen instances of massive money printing since the 80s but no significant inflation until we had the COVID supply side shock. Now we're getting inflation because of tariff uncertainty, also a supply side shock.
Friedman is wrong, inflation is primarily caused by supply side shocks.
It's more complicated than that (lending also increases the money supply) though you're right that "printing money" loosely speaking is the primary irreversible driver.
dennis_jeeves2 · 10h ago
Of course the printed money has to be put into circulation ( either lending or spending by the gov)
somewhereoutth · 10h ago
In modern economies, banks create money by originating loans. The government controls this process with various policy levers.
orwin · 10h ago
Depends on the default rate, and I'm pretty sure the past year in the US, default created more money than what was printed (even taking QE into account).
Basically why everybody decided to go with money printing during COVID btw, people realised in 2008 that a 2B default is the equivalent to printing 2B, so if that's the case, why not print money instead (that's a bad calculation imho, in my opinion in a capitalist market economy you need defaults for the market to work, and I would say, you need defaults that pierce the corporate veil).
throw__away7391 · 10h ago
People in the US believe that if inflation eases, for example from 4% to 3%, that means that prices are going to go back down to what they used to be before inflation started rising. They furthermore believe that if that does not happen it is proof that the media is lying.
_--__--__ · 10h ago
Politicians love communicating about 2nd and 3rd derivatives of prices and debt in ways that even mathematically literate people have trouble immediately interpreting. There's a famous quote about Nixon doing it but it's honestly the current standard mode from all sides trying to avoid blame for the state of the deficit and monetary supply.
esseph · 10h ago
Absolutely not, as a rule.
bithive123 · 10h ago
"Inflation" simply refers to a rise in general price levels. The cause of inflation is known: someone sets a price.
There isn't a single reason why someone might raise a price. It could be that they have some ideology about the size of the money supply (i.e. "printing money") or it could be that the costs of their inputs went up ("inflation") due to tariffs, or other supply chain problems. Or it could be a cynical bet that the market would bear a higher price ("using inflation as an excuse").
Blaming inflation on this-or-that cause is most definitely a political rather than theoretical exercise.
argentinian · 7h ago
Why would it be impossible to research it's cause in a specific context?
You are not offering an argument about why can't it be investigated.
cramcgrab · 9h ago
Time to cut interest rates. I’m tired of paying high mortgage interest and loan interest.
denimnerd42 · 9h ago
Erased the spending power of my savings (investments) as well.
FirmwareBurner · 11h ago
Me as an European with this issue for 3+ years: "first time?" /meme
In order to make it mathematically possible for a third party to compete, we need to switch to something with more nuance than single vote, first-past-the-post winner-take-all elections. Ranked Choice Voting has some momentum right now, and AFAICT is no worse than any of the other options (they all fail in certain edge cases, I believe; it's just a matter of which ones).
That will likely benefit hard assets like real estate and those with big stock portfolios, as top blue chips generally have some pricing power to offset increased cost, but I think real income will drop and you’ll get all sorts of weird second order consequences.
If I had enough confidence in it, an interesting bet might be borrowing to invest in big tech blue chips. You’re betting that Trump gets his way with the Fed politically, tech benefits from low rates, tech has power to raise prices, and that Trump will inflate away your debt.
Won’t be good for most Americans, but if you can’t beat em, join em?
{not financial advice}
The next step if that happened could well be the puppetized Fed expanding the balance sheet to buy long term bonds. That would probably be bad for everything. Except perhaps gold.
Plus, while the real estate market on a whole might go up, I have a hunch the chances of one individual house appreciating are more varied than the chances of one of the big tech stocks appreciating… as they are the market at this point.
Edit to add: I think for the average American, real estate is the only plausible way to invest on margin, as you’ll never get 5:1 leverage at your brokerage, if you even have a brokerage.
Margin trading is for the already-wealthy. You can get a home with near-zero assets.
https://www.bls.gov/charts/consumer-price-index/consumer-pri...
Employment figures are different and have had lots of problems in recent years.
Now if you’re happy comparing 12 month CPI averages ending in July then sure 2025’s July was 0.2% lower than 2024’s July. But I’m assuming you’re talking Jan-Dec 2024 which we have vs Jan-Dec 2025 which IMO is to early to call.
> Does it really matter as long as you have a years worth of data including all seasons?
Using the correct words for something makes a big difference for communication. After jumping through all these hoops we understand what we each mean at this point, but it definitely didn’t need to take this much back and forth.
Anyways inflation is actually declining and is well below 2022 levels.
https://www.bls.gov/charts/consumer-price-index/consumer-pri...
They also are a price increase. Whether that winds up being inflationary or deflationary depends on how much that price change impacts demand, which will likely vary from good to good.
Inflation is everywhere and always a monetary (or money supply) phenomenon.
Reposting my original claim:
Tariffs are deflationary, actually. They are a form of taxation and act to inhibit demand.
Inflation is actually declining and is well below 2022 levels.
https://www.bls.gov/charts/consumer-price-index/consumer-pri...
There are multiple schools of thought on causes of inflation, but generally I agree with late Milton Friedman that it is "everywhere and always a monetary phenomenon". Money supply expansion growing faster than GDP expansion causes inflation.
But… that was correct? It went up, then back down, due to a very unusual (almost unique, thus far) external cause.
https://www.statista.com/statistics/273418/unadjusted-monthl...
No, it wasn't correct. By "transitory" the Fed meant "no need to do anything, inflation will go down on its own". It didn't go down on it's own, and the Fed had to act, too little too late, which is now causing prolonged inflation problems.
> It went up, then back down, due to a very unusual (almost unique, thus far) external cause.
The cause wasn't external, neither unusual nor unique, it was the Fed's start of interest rate increases, precisely at the time the inflation trend reversed.
>...In 2021, Krugman tweeted: "I like it and plan to steal it. This report does look like what you'd expect if recent inflation was about transitory disruptions, not stagflation redux".
As Smith pointed out:
>...But in late 2021, inflation spread to become very broad-based. Services inflation was always significant, and took over from goods inflation as the main contributor in 2022.
>The notion that this was just some transient supply-chain disruptions that was only affecting specific products was absolutely central to Team Transitory’s claims in the summer of 2021. And that was incorrect.
>...Team Transitory also called the end of the inflation at least a year and a half too soon. On October 13, 2021 Krugman tweeted "Three month core inflation. Why isn't everyone calling this a victory for team transitory"
>...So they didn’t entirely whiff here. They just greatly overstated their case. And their complacency in 2021 probably fed into the Fed’s decision to delay the start of rate hikes until 2022, which in retrospect looks like a serious mistake.
What did get vindicated was mainstream economics as taught in our textbooks.
As Smith wrote:
>...Mainstream macro’s first victory was in predicting that the inflation would happen in the first place. In February 2021, Olivier Blanchard used a very simple “output gap” model to predict that Biden’s Covid relief bill would raise demand by enough to show up in the inflation numbers. His prediction came true. He didn’t get everything right — he thought wages would rise more than consumer prices, and he neglected the lagged effects of Trump’s Covid relief packages and Fed lending programs. But his standard simple mainstream model got the basic prediction right when most people made the opposite prediction, and this deserves recognition.
>More importantly, mainstream macro appears to have gotten policy right.
https://www.noahpinion.blog/p/grading-the-economic-schools-o...
You can note this in the buying power of the USD during the 1800s: https://www.officialdata.org/us/inflation/1800?amount=1
But no, macroeconomics is understood from sound general principles, but it is not a robust predictive theory. The analogy upthread to Navier-Stokes is apt.
No comments yet
To me the answer is very simple, the primary (not sole) driver is govt printing currency indiscriminately.
Friedman is wrong, inflation is primarily caused by supply side shocks.
Basically why everybody decided to go with money printing during COVID btw, people realised in 2008 that a 2B default is the equivalent to printing 2B, so if that's the case, why not print money instead (that's a bad calculation imho, in my opinion in a capitalist market economy you need defaults for the market to work, and I would say, you need defaults that pierce the corporate veil).
There isn't a single reason why someone might raise a price. It could be that they have some ideology about the size of the money supply (i.e. "printing money") or it could be that the costs of their inputs went up ("inflation") due to tariffs, or other supply chain problems. Or it could be a cynical bet that the market would bear a higher price ("using inflation as an excuse").
Blaming inflation on this-or-that cause is most definitely a political rather than theoretical exercise.
You are not offering an argument about why can't it be investigated.