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ibstubro's avatar

By what slight of hand is the government maintaining the fiction that inflation is under control?

Asked by ibstubro (11248 points ) April 4th, 2014

Here in the Midwestern U.S. freaking stew meat is approaching (or at/over) $5 a pound and gasoline is again near $4 a gallon. I got a 6” sub at Subway yesterday and it was just a few cents from $5. Seems like just yesterday that all foot-longs were only $5!

How can the government maintain the fiction of inflation being under control, and why are we, the citizens, swallowing it?

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26 Answers

elbanditoroso's avatar

I want to compliment you on the non-slanted, non-opinionated, non-trolling objective recitation of your question.

cazzie's avatar

Americans have been enjoying an overly cheap bonanza on both food and petrol. If you all lived in the real world, you’d be paying much much more for both.

gailcalled's avatar

(Sleight of hand)

ibstubro's avatar

I could have tried to hide my bias and then beat everyone into submission, @elbanditoroso. Instead I just let ‘er rip. Feel free to prove me wrong.

I tend to agree with you, @cazzie. It amazes me the amount of money the average American spends frivolously (phone, internet, TV, etc., etc.) per month without skipping a beat.

Thanks, @gailcalled, I had a premonition that I was in error.

Adirondackwannabe's avatar

By the mushroom philosophy. Keep em in the dark and feed em manure. Beef prices are going to be high for a while. The beef cattle numbers are the lowest they’ve been in a long long time.

JLeslie's avatar

If gas goes up, usually everything goes up that needs to be moved around to get to you. Food is one of the biggies that we notice right away aside from the actual fuel cost at the pump.

cazzie's avatar

I LOVE visiting my relatives in the USA. Everything is so cheap! I feel super wealthy when I go there now and I’m on public assistance in the country I live because I’m right on the ‘poverty’ boarder now that I’m a single mom and his dad is fighting me about child support and quit his job to minimise the payments. I can afford to buy really nice groceries there and eat out for less than what my costs are here. And don’t get me started on how cheap alcohol is!

canidmajor's avatar

Gosh, I don’t know a single adult who believes that the government IS maintaining such a fiction. Maybe promoting such a fiction, perhaps…

Symbeline's avatar

People swallow it because, what else are you going to do? You have no choice but to pay for things. Before the populace gets up to do something, things are going to have to be much, much worse than they are currently.

jaytkay's avatar

Show us some government figures on specific product prices that are incorrect. This nefarious plot must not go unopposed.

ragingloli's avatar

Inflation being under control does not mean that it is zero.
Besides, their are other factors that influence price.

ibstubro's avatar

Beef prices are crazy, @Adirondackwannabe. I don’t know why people continue to buy it, especially when pork is (currently) such a bargain.

True, @JLeslie, but you notice that “what goes up has to come down” rarely applies.

You need to visit us more often, @cazzie. We have a local Mexican restaurant where 4 adults eat all the chips and salsa they want, each get an entree and at least one side and several alchoholic drinks and the bill is under $50 with tip.

Good point, @canidmajor, and welcome! Stick around.

Agreed, @Symbeline. Prices are high, but people just find a way to come up with the money.

zenvelo's avatar

Gasoline is cheaper than it was a year ago. Beef prices are up because of drought in corn producing areas, raising feed prices; but that is seasonal, not structural. Choose something else to eat, it won’t be as expensive.

Overall, prices are level. Consumer electronic prices continue to fall.

JLeslie's avatar

@ibstubro Yup. Or there is a long delay. When gas prices went up like crazy during the Bush Presidency, food went up a lot too. Then gas prices came down (election coming up and all) but the food for the most part stayed expensive for almost two years! Then finally prices came down again. Now food prices are on the way up again.

Some of the prices go up more than justified, but the companies can sing the song of high fuel prices to explain their price increase. Or, insurance companies can blame ACA for price increases even if the insurance company was unaffected by the new laws, etc. if the public believes it the market will bear higher prices. To a point.

Jaxk's avatar

The Core Inflation used by the Fed does not include food or gas. consequently it is hanging around 1–2%. You may wonder why it would not include those but it is because they are too volatile.

Darth_Algar's avatar

If only the government would force Subway to continue it’s Five Dollar Foot-long promotion….

kritiper's avatar

Wishful thinking!!!

Afos22's avatar

The government convinces people that times are hard, but soon everything will be peachy again. Also, getting people to believe that inflation is normal is important.

Dan_Lyons's avatar

If you ever watch TV anymore you will notice that all the advertisements disregard the Global
depression inflicted upon us in the mid-2000 housing bobble collapse.

All the credit card companies are after us again and the auto industry is admitting nothing.

The news no longer concerns itself with the people who lost their homes, families, pensions and jobs during this criminally insane action perpetrated upon humanity by the bankers and real estaters and the others involved in this interesting piece of the 21st century.

Ergo, it would seem that the slight of hand the government is using to maintain the fiction that inflation is under control is simply to ignore anyone not able to be like them and keep ahead of the music so they can be one of those who finds a chair when the music stops.

You know they are setting us up for another plucking (as they pluck away at us on the road to the big bang) which will probably be coming within the next decade. They will stop the music and pull the rug out from under us just as we get used to the price of gas reaching $10 per gallon.

JLeslie's avatar

@Dan_Lyons Thank goodness the news shut up about housing and unemployment. Talking less about it anyway. The media contributed to making things worse. If people believe things are dire then it is like a self fulfilling prophecy. I am all for the reporting of such things, but the way the media will dwell and exaggerate the doom and gloom is destructive. They reported foreclosures, but did they ever break it down by primary residence and investment properties? No, but that is a very important piece of information. Were people more likely to short sell, because the mediawas talking about, I think so. I don’t know if everyone who did it would have without feeling like everyone else was doing it.

Darth_Algar's avatar

I love how Americans pay an artificially low price for their food and fuel (thanks to ridiculous government subsidies) then still have the nerve to complain about the price.

pleiades's avatar

Oh you’re just feeling this now? I’ve felt 4$ gas since 2008!

Also come on man, a footlong for 5$? that was fantasy land welcome back. Any real mom and pop shop would never sell 12” of a sandwhich for 5$. I’m not saying to get off your cheap horse, I’m just saying let’s be realistic here. I’d love to save a buck or two as well with gas and food costs.

The case with Subway is I think they recently took out the “rubber” agent in their bread

Kropotkin's avatar

The Subway sandwich index is the definitive measurement of inflation.

PhiNotPi's avatar

A small inflation rate is beneficial to the economy. For example, it encourages spending. If people knew that prices were going to fall in the future (deflation), then they would choose not spend any money in present, which would hurt the income of businesses (and their employees). With inflation, there is an encouragement to buy products sooner rather than later.

Adirondackwannabe's avatar

@PhiNotPi You’re right, deflation is rough. When prices fall it begins to get hard for borrowers. Look at the farm crisis in the 80’s and the housing market collapse of a few years ago.

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