Labor Shortage

[RiverDog]

This is all going to get insane economically. Oil rising. Supply chains disrupted due to Russia. Global Pandemic. I don't why this happens, but it just seems humans have to be really, really, really stupid at certain points so we can have massive problems and drama. That's why I always admired the fictional Vulcans. Focus on logic than emotion. Human race would be so much better off they weren't such an emotional and idiotic species.

And it's going to get worse before it gets better.

The Fed is going to have to raise interest rates and put the brakes on the economy or we're heading for years of double-digit inflation. It's a vicious cycle of a dog chasing its tail. The mentality is 'better buy it today because tomorrow, the price will go up."

Two weeks ago, bought a new 2022 pickup truck, trading in my 8 year old truck. Rather than using the money they gave me for my trade-in as a down payment or pay for the new truck in cash, I'm taking the trade in funds and investing it while borrowing money at 1.9% to pay off the loan on the new truck. It's a fixed rate, so due to the effects of inflation, the cash I use for monthly payments will become cheaper relative to other goods I could buy with it, so no sense paying up front. Plus that money from the trade in will be invested and I should be able to at least double that 1.9% interest rate. I can leave the funds I would have used to pay for the new truck in my IRA and allow it to earn money tax free.

That's the problem with inflation. If the Fed doesn't raise interest rates and make it more expensive for banks to borrow money, people will do just as I'm doing and buy stuff that they don't really need because it's cheaper than waiting for the inevitable price increase, reducing supply and driving prices up.

It's also going to make Biden a one term President just like it did with Jimmy Carter. It's not fair as most of these economic problems weren't their fault, but they both over promised and under delivered, and voters did and will hold them accountable.

[Aseahawkfan]

And it's going to get worse before it gets better.

The Fed is going to have to raise interest rates and put the brakes on the economy or we're heading for years of double-digit inflation. It's a vicious cycle of a dog chasing its tail. The mentality is 'better buy it today because tomorrow, the price will go up."

Two weeks ago, bought a new 2022 pickup truck, trading in my 8 year old truck. Rather than using the money they gave me for my trade-in as a down payment or pay for the new truck in cash, I'm taking the trade in funds and investing it while borrowing money at 1.9% to pay off the loan on the new truck. It's a fixed rate, so due to the effects of inflation, the cash I use for monthly payments will become cheaper relative to other goods I could buy with it, so no sense paying up front. Plus that money from the trade in will be invested and I should be able to at least double that 1.9% interest rate. I can leave the funds I would have used to pay for the new truck in my IRA and allow it to earn money tax free.

That's the problem with inflation. If the Fed doesn't raise interest rates and make it more expensive for banks to borrow money, people will do just as I'm doing and buy stuff that they don't really need because it's cheaper than waiting for the inevitable price increase, reducing supply and driving prices up.

It's also going to make Biden a one term President just like it did with Jimmy Carter. It's not fair as most of these economic problems weren't their fault, but they both over promised and under delivered, and voters did and will hold them accountable.

It doesn't appear like we will get stagflation, but maybe. So far employment is really strong. With America looking to shore up more supply chains by bringing production back to America, should be an even bigger increase in jobs and demand.

If we get stagflation like the 70s, that will be absolutely horrible. Massive inflation with a drop in GDP growth and increasing unemployment.

What if Trump runs against Biden in 2024 with massive economic disruption? You think we'll have President Chaos back in office? Hopefully with less chaos if he is in a 2nd term where he doesn't have to worry about re-election.

[RiverDog]

It doesn't appear like we will get stagflation, but maybe. So far employment is really strong. With America looking to shore up more supply chains by bringing production back to America, should be an even bigger increase in jobs and demand.

If we get stagflation like the 70s, that will be absolutely horrible. Massive inflation with a drop in GDP growth and increasing unemployment.

What if Trump runs against Biden in 2024 with massive economic disruption? You think we'll have President Chaos back in office? Hopefully with less chaos if he is in a 2nd term where he doesn't have to worry about re-election.

I don't think unemployment will ever be a problem no matter how bad the economy gets unless some large scale adjustments are made in labor intensive industries that rely more on automation, and even then, it wouldn't be enough to compensate for the demographical change. The nation is still getting older and the worker to retiree ratio keeps getting smaller, and that will continue until the baby boomer generation is done retiring at the end of this decade.

My biggest worry is inflation. I lived through it in the late 70's/early 80's when I was just coming out of college. Now that I'm retired, I realize just how vulnerable folks on fixed income are. They gave SS recipients a 5.9% raise then took a big chunk of it back by raising Medicare premiums and deductibles. I figured out that the net raise was 4.4%. Inflation for last month was 7.5%, and that was before the Russians invaded Ukraine and sent gas prices way up.

I hate to think of what Trump Part II might look like. Hopefully the party comes to its senses by 2024, but I'm not holding my breath. We'll see how many Trump-style candidates win this November. Biden is certain to be a one term President and the Republicans will likely have a majority in both houses by then.

[Aseahawkfan]

I don't think unemployment will ever be a problem no matter how bad the economy gets unless some large scale adjustments are made in labor intensive industries that rely more on automation, and even then, it wouldn't be enough to compensate for the demographical change. The nation is still getting older and the worker to retiree ratio keeps getting smaller, and that will continue until the baby boomer generation is done retiring at the end of this decade.

My biggest worry is inflation. I lived through it in the late 70's/early 80's when I was just coming out of college. Now that I'm retired, I realize just how vulnerable folks on fixed income are. They gave SS recipients a 5.9% raise then took a big chunk of it back by raising Medicare premiums and deductibles. I figured out that the net raise was 4.4%. Inflation for last month was 7.5%, and that was before the Russians invaded Ukraine and sent gas prices way up.

I hate to think of what Trump Part II might look like. Hopefully the party comes to its senses by 2024, but I'm not holding my breath. We'll see how many Trump-style candidates win this November. Biden is certain to be a one term President and the Republicans will likely have a majority in both houses by then.

From what the books say as I too young to really know what was going on was that the 70s was Stagflation. That is inflation with no economic growth and rising unemployment. That situation is extremely bad.

Regular inflation though bad can be managed much easier as long as we're growing with strong employment. It will be rough for a little while, but everything will go up in value including wages and assets.

You lived through Stagflation in the 70s and that is a terrible economic situation.

[RiverDog]

From what the books say as I too young to really know what was going on was that the 70s was Stagflation. That is inflation with no economic growth and rising unemployment. That situation is extremely bad.

Regular inflation though bad can be managed much easier as long as we're growing with strong employment. It will be rough for a little while, but everything will go up in value including wages and assets.

You lived through Stagflation in the 70s and that is a terrible economic situation.

Mid 70's to well into the 80's. In 1976, Dem candidate Jimmy Carter hit incumbent Gerald Ford hard over the "misery index", a combination of unemployment, inflation, and interest rates, as it was 12.7% during the 1976 campaign (I was a junior in college). By 1980, Carter's 4th year in office and the beginning of his campaign for re-election, the misery index was well over 20%, so Reagan used this fact to great advantage. Campaigning for President was a little easier than being President, a fact that Reagan himself found out as things didn't get turned around until well into his first term.

The biggest difference between then and now is the unemployment rates. It ran from 6% to just under 11% during those years. Back then, people used to line up just to get an application. The Vietnam War had ended, slowing down the economy just as the baby boomer generation was hitting the job market, so there was an excess of workers. Today, unemployment is 3.9%.

You're looking at how we've managed inflation since the 80's. Inflation can be managed when it's only a few percentage points, but once it begins to spiral, it's very difficult to control. Both Nixon and Carter tried controlling it by issuing voluntary wage and price controls, but it didn't work. The Fed tried to manage inflation by raising interest rates but all that did was weaken an already faltering economy and put us in a recession. What got us out of it was Reagan's tax cuts and an increase in military spending, which re-invigorated the economy, and companies ditching COLA clauses in their contracts in favor of fixed wage increases, which helped level out prices.

Today, it's not going to be as easy to control wage increases as there's a labor shortage. If you don't give a worker a good sized raise, they'll find someone that will. It's what's led to "The Great Resignation". That wasn't the case in the 80's. Companies could afford a strike because they could easily find scabs that would take a fired union worker's job. Union workers were afraid to give up their jobs or go on strike in an environment of skyrocketing prices, so they were more willing to accept management offers. If you can't control wages, you can't control prices.

Until something is done to reduce the demand for workers, either by increasing the supply of workers by allowing more immigrants or by automating tasks and eliminate the need for humans, wages will continue to rise followed by an increase in prices to cover those wages.

There's been 1.5 million refugees that have fled Ukraine since the invasion, a number that is sure to grow. How about we bring some of them over here and teach them how to make widgets?

[RiverDog]

Let me add a personal note from that period of time in the late 70's, one that I may have mentioned previously. I got my first job out of college in March of 1978 as a supervisor trainee. The first raise I got the following year was 10.4% even though inflation was running over 13%. Since my employer, Carnation Company, was a government contractor selling everything from french fries and instant mashed potatoes to ice cream and evaporated milk to schools, the military, etc, and since I was salaried, our raises, ie mid managers, were limited to an average of 10% in order to comply with Jimmy Carter's voluntary wage and price controls as they weren't voluntary if you wanted that government contract.

However, the high rollers in the company, the plant managers and up, were able to duck the wage increase limitations by giving themselves more stock options, a bigger expense account, a new company car, etc, and at the bottom end of the totem pole, the workers I supervised got a 13% raise because they had a COLA (cost of living adjustment) clause in their contract that was tied to the consumer price index and was legally binding.

[Stream Hawk]

I love reading your stuff, River. Your wealth of experience in US economic history is very useful. I’m at least 20 years your junior, having graduating college in 2001. I experienced the post 90s boom and 911 recession. Then the housing crisis at the end of the Bush administration. This one is unique because of the low unemployment. Disclaimer: I have never had a real strong grasp on macro economics.

One of your solutions for the labor shortage causing inflation dilemma is adding more immigrants. What about Mexicans? Perhaps that can be a solution while Biden remains in office? We will see if it does help produce an uptick in the economy. I know the clown won’t go for that it if he were run & “win” in 2024 —which is my worst nightmare. Well, second worst nightmare besides Putin-induced WW3.

[RiverDog]

I love reading your stuff, River. Your wealth of experience in US economic history is very useful. I’m at least 20 years your junior, having graduating college in 2001. I experienced the post 90s boom and 911 recession. Then the housing crisis at the end of the Bush administration. This one is unique because of the low unemployment. Disclaimer: I have never had a real strong grasp on macro economics.

Thanks a lot, Stream Hawk!

Since my parents grew up relatively poor and in the Great Depression, they didn't have too much sympathy for me when I complained about getting 'only' a 10.4% raise after having landed a job that paid more than either of them were making.

One of your solutions for the labor shortage causing inflation dilemma is adding more immigrants. What about Mexicans? Perhaps that can be a solution while Biden remains in office? We will see if it does help produce an uptick in the economy. I know the clown won’t go for that it if he were run & “win” in 2024 —which is my worst nightmare. Well, second worst nightmare besides Putin-induced WW3.

Even though I consider myself to be a staunch fiscal conservative, I'm a huge advocate of a robust but secure and well vetted immigration policy regardless of race or country of origin. Having worked in a labor intensive industry that employed a lot of unskilled and semi skilled workers for over 40 years, I'd take a crew of immigrants over native born Americans any day of the week and twice on Sundays. Immigration was the biggest single issue I had with "The Clown." IMO our immigration policy should fluctuate according to our labor demands and infrastructure capacity.

People fear most what they know least. They hear someone speaking in a foreign language, and it unnerves them, makes them paranoid. It's a natural reaction, albeit a phobic one. I really wish people could see things from the point of view of which I've experienced.

It's a little off topic, but at my former place of work, the vast majority of my crews were foreign born, well over 80%, from all over the world, and as you would expect, didn't know the first thing about American football. However, during football season when several of us native borns would wear something Seahawk on "Blue Friday" and we told our crew why we were doing it, nearly everyone started copying us and went and bought a Seahawk jersey so they could wear it on Fridays just so they could be accepted as part of something.

[Aseahawkfan]

Mid 70's to well into the 80's. In 1976, Dem candidate Jimmy Carter hit incumbent Gerald Ford hard over the "misery index", a combination of unemployment, inflation, and interest rates, as it was 12.7% during the 1976 campaign (I was a junior in college). By 1980, Carter's 4th year in office and the beginning of his campaign for re-election, the misery index was well over 20%, so Reagan used this fact to great advantage. Campaigning for President was a little easier than being President, a fact that Reagan himself found out as things didn't get turned around until well into his first term.

The biggest difference between then and now is the unemployment rates. It ran from 6% to just under 11% during those years. Back then, people used to line up just to get an application. The Vietnam War had ended, slowing down the economy just as the baby boomer generation was hitting the job market, so there was an excess of workers. Today, unemployment is 3.9%.

You're looking at how we've managed inflation since the 80's. Inflation can be managed when it's only a few percentage points, but once it begins to spiral, it's very difficult to control. Both Nixon and Carter tried controlling it by issuing voluntary wage and price controls, but it didn't work. The Fed tried to manage inflation by raising interest rates but all that did was weaken an already faltering economy and put us in a recession. What got us out of it was Reagan's tax cuts and an increase in military spending, which re-invigorated the economy, and companies ditching COLA clauses in their contracts in favor of fixed wage increases, which helped level out prices.

Today, it's not going to be as easy to control wage increases as there's a labor shortage. If you don't give a worker a good sized raise, they'll find someone that will. It's what's led to "The Great Resignation". That wasn't the case in the 80's. Companies could afford a strike because they could easily find scabs that would take a fired union worker's job. Union workers were afraid to give up their jobs or go on strike in an environment of skyrocketing prices, so they were more willing to accept management offers. If you can't control wages, you can't control prices.

Until something is done to reduce the demand for workers, either by increasing the supply of workers by allowing more immigrants or by automating tasks and eliminate the need for humans, wages will continue to rise followed by an increase in prices to cover those wages.

There's been 1.5 million refugees that have fled Ukraine since the invasion, a number that is sure to grow. How about we bring some of them over here and teach them how to make widgets?

They want inflation at the moment. They may not be able to come out and say they want inflation, but they want inflation. There is no other choice but to inflate their way out of this Debt to GDP ratio from the stimulus and money printing.

Main thing is not to get rising unemployment while the inflation is high as that will cause major issues. Rising wages are necessary to offset the inflation. I imagine they will let it rise for a while, then start trying to put on the brakes with interest rate increases to reduce borrowing and liquidity. How that affects the economy after this much stimulus and money printing who knows.

The plan so far is a .25 interest rate increase in March. Not sure how many we will get this year and now with the sanctions on Russia that will affect the global economy, they might proceed more cautiously.

Not sure how this one will play out but 70s style stagflation is a worse case scenario which would likely lead to a serious recession.

Do you think President Chaos is better for the economy if the pandemic is mostly behind us? Can he win again if Biden fails to get prices, especially gas prices, under control?

[RiverDog]

They want inflation at the moment. They may not be able to come out and say they want inflation, but they want inflation. There is no other choice but to inflate their way out of this Debt to GDP ratio from the stimulus and money printing.

Main thing is not to get rising unemployment while the inflation is high as that will cause major issues. Rising wages are necessary to offset the inflation. I imagine they will let it rise for a while, then start trying to put on the brakes with interest rate increases to reduce borrowing and liquidity. How that affects the economy after this much stimulus and money printing who knows.

The plan so far is a .25 interest rate increase in March. Not sure how many we will get this year and now with the sanctions on Russia that will affect the global economy, they might proceed more cautiously.

Not sure how this one will play out but 70s style stagflation is a worse case scenario which would likely lead to a serious recession.

Do you think President Chaos is better for the economy if the pandemic is mostly behind us? Can he win again if Biden fails to get prices, especially gas prices, under control?

At least in the sense of available jobs, unemployment won't be a problem for the foreseeable future. There just isn't enough young people in the pipeline to replace the workers we're losing through death and retirement. There is a potential problem with 'real' unemployment in that there are chronically unemployed that don't show up in the figures because they haven't worked long enough to qualify for unemployment insurance. These are people like the mentally ill, drug addicts, homeless, etc, that are basically not employable. Those numbers could go up. However, I'd argue that's not an economic problem, rather it's a social problem.

They need to put the brakes on the economy in order to reel in inflation. Last quarter, the GDP increased by 7%. We can't sustain that growth and control inflation. Slowing down demand will help allow the supply chain problems to get straightened out as well as reel in inflation to some degree. The Fed needs to raise interest rates to make it more expensive for people to buy and the government needs to quit spending money. It sounds cold hearted but that's the only way we're going to be able to get inflation back under control.

The last two economic stimulus payments were completely unnecessary and contributed to both the high inflation we're having to deal with today and the supply chain problems as all it did was keep demand for products high. Typical of this phenomena is the auto industry. When the pandemic first broke out in March of 2020, auto manufacturers canceled their order for microchips because they thought that people weren't going to be able to afford to buy new cars. But the economy rebounded so quickly (Q3 of 2020 GDP was +33.8) and the government put so much money back in people's hands that new car demand never went down, but since Detroit had canceled their order for new chips, they lost their spot in line once the worldwide chip shortage struck. I was in the market for a new car last fall when the 2022 models came out but I couldn't find a new 2022 of my choice anywhere in the PNW. I finally got my new 2022 a couple weeks ago.

As far as which POTUS would be better for the country economically, I don't think it's going to matter much as I fully expect the Republicans will regain control of the House, perhaps even the Senate, in 2022. Congress controls the purse strings. The problem we're going to be faced with is that due to the invasion of Ukraine, there's going to be a lot of pressure on Congress to increase defense spending. That's not going to help get inflation under control. Besides, I don't see the Orange Baboon winning the nomination in 2024. His stance on Putin may have finally sealed his fate. We'll see how his candidates perform this November.

[mykc14]

My biggest worry is inflation. I lived through it in the late 70's/early 80's when I was just coming out of college. Now that I'm retired, I realize just how vulnerable folks on fixed income are. They gave SS recipients a 5.9% raise then took a big chunk of it back by raising Medicare premiums and deductibles. I figured out that the net raise was 4.4%. Inflation for last month was 7.5%, and that was before the Russians invaded Ukraine and sent gas prices way up.

I hate to think of what Trump Part II might look like. Hopefully the party comes to its senses by 2024, but I'm not holding my breath. We'll see how many Trump-style candidates win this November. Biden is certain to be a one term President and the Republicans will likely have a majority in both houses by then.

Social Security- at least your going to be able to benefit from it, even though it is costing us over a trillion dollars a year. I think we should put an end date to Social Security, we're already going to have to drop benefits by 2034 if we don't make any changes. I'm thinking plan on paying it for 20-30 more years but let people know they are going to have to fund their own retirement (really they should be anyways). As far as I know there isn't really a good long-term plan for it; are we are just going to keep reducing payments until it runs out? I would rather us all know there is an end date in the distant future that we can plan for. Personally, I'm not planning on having any Social Security left for myself.

[Aseahawkfan]

Social Security- at least your going to be able to benefit from it, even though it is costing us over a trillion dollars a year. I think we should put an end date to Social Security, we're already going to have to drop benefits by 2034 if we don't make any changes. I'm thinking plan on paying it for 20-30 more years but let people know they are going to have to fund their own retirement (really they should be anyways). As far as I know there isn't really a good long-term plan for it; are we are just going to keep reducing payments until it runs out? I would rather us all know there is an end date in the distant future that we can plan for. Personally, I'm not planning on having any Social Security left for myself.

The number of people who would end up on welfare or homeless if not for Social Security would be immense. Social security isn't going away even if they have to keep boosting taxes. No idea why this keeps getting pushed out there as it will never happen. There is not enough votes among the American people to make this happen. Even the Republicans would lose huge support trying to get rid of social security. If anything, social benefits are going to expand over time, not shrink due to how The Fed manages the economy creating an economy where working people are punished for being wage earners and asset purchasers which are mostly the wealthy are going to create a haves and have nots society which is going to lead to European style social services as Americans have no choice but to turn to the government to equalize the bad money management by The Fed and government.

[RiverDog]

Social Security- at least your going to be able to benefit from it, even though it is costing us over a trillion dollars a year. I think we should put an end date to Social Security, we're already going to have to drop benefits by 2034 if we don't make any changes. I'm thinking plan on paying it for 20-30 more years but let people know they are going to have to fund their own retirement (really they should be anyways). As far as I know there isn't really a good long-term plan for it; are we are just going to keep reducing payments until it runs out? I would rather us all know there is an end date in the distant future that we can plan for. Personally, I'm not planning on having any Social Security left for myself.

The number of people who would end up on welfare or homeless if not for Social Security would be immense. Social security isn't going away even if they have to keep boosting taxes. No idea why this keeps getting pushed out there as it will never happen. There is not enough votes among the American people to make this happen. Even the Republicans would lose huge support trying to get rid of social security. If anything, social benefits are going to expand over time, not shrink due to how The Fed manages the economy creating an economy where working people are punished for being wage earners and asset purchasers which are mostly the wealthy are going to create a haves and have nots society which is going to lead to European style social services as Americans have no choice but to turn to the government to equalize the bad money management by The Fed and government.

Social Security, in one form or another, is going to be around for the foreseeable future. It's still known as the 3rd rail of politics: Touch it and you're dead. But I do think that they're going to have to make some drastic changes to it in order for it to remain viable. One change that would help immensely would be to eliminate early retirements and make everyone work until 67. It would not only help SS's balance sheet, but it would help address the labor shortage. They could also eliminate disability benefits and turn it over to private insurance, reduce or eliminate survivor benefits, plow back the income tax taken from Social Security recipients into the SS fund, raise the maximum age to 69 or 70. And yes, they will have to raise payroll taxes.

Mykc, you are wise not to plan on Social Security being around. Especially with the way inflation is going, it's unlikely that benefits will be able to keep pace. It was never meant to be the sole means of retirement income. Personally, I'm delaying taking my benefit until I turn 70 so as to maximize my monthly benefit, ie 132% of my 'full retirement amount'. Since mine is the higher benefit of the two of us, we're maximizing it as if I die before my wife, she gets the larger of the two for the rest of her life. In addition to allowing the monthly benefit to grow, delaying it allows us to keep our income low and transfer more money from traditional IRA's that we owe taxes on to a Roth and pay taxes on it at 12% vs. 22% if I were taking my SS benefit.

Too many people look at Social Security as an accountant would, in other words, trying to get the maximum amount out of it. I look at it as insurance against running out of money. I don't need it now so I'll wait to take it. Delaying it allows the benefit to grow by 8% a year.

[Aseahawkfan]

Social Security, in one form or another, is going to be around for the foreseeable future. It's still known as the 3rd rail of politics: Touch it and you're dead. But I do think that they're going to have to make some drastic changes to it in order for it to remain viable. One change that would help immensely would be to eliminate early retirements and make everyone work until 67. It would not only help SS's balance sheet, but it would help address the labor shortage. They could also eliminate disability benefits and turn it over to private insurance, reduce or eliminate survivor benefits, plow back the income tax taken from Social Security recipients into the SS fund, raise the maximum age to 69 or 70. And yes, they will have to raise payroll taxes.

Mykc, you are wise not to plan on Social Security being around. Especially with the way inflation is going, it's unlikely that benefits will be able to keep pace. It was never meant to be the sole means of retirement income. Personally, I'm delaying taking my benefit until I turn 70 so as to maximize my monthly benefit, ie 132% of my 'full retirement amount'. Since mine is the higher benefit of the two of us, we're maximizing it as if I die before my wife, she gets the larger of the two for the rest of her life. In addition to allowing the monthly benefit to grow, delaying it allows us to keep our income low and transfer more money from traditional IRA's that we owe taxes on to a Roth and pay taxes on it at 12% vs. 22% if I were taking my SS benefit.

Too many people look at Social Security as an accountant would, in other words, trying to get the maximum amount out of it. I look at it as insurance against running out of money. I don't need it now so I'll wait to take it. Delaying it allows the benefit to grow by 8% a year.

If social security runs out, we'll just end up like Europe with an immense welfare state and higher taxes. No politicians will allow the level of homelessness and poverty that would occur without some kind of retirement safety net in place. The economic devastation from allowing something like that would be immense sort of like no politician was going to let Americans starve during a global pandemic. Same psychology.

You'll either have social security or European style socialism. There is no alternative. People who are impoverished will revolt and vote it in. There are more people unable or unwilling to manage their money well for retirement with a vote than there are people who managed their money and finances well.

It's a pipedream of a certain group of conservatives that think they'll somehow force the majority to go without some kind of social safety net in place for retirement and general care. I know a lot of so called conservative folk who have managed their money like trash and will not survive without some kind of welfare state in place.

This is coming from someone who could survive without social security and would never use welfare. But given I understand economics, losing the consumption of people on social security or the welfare system with the number of taxes in place like property tax, sales tax, income tax, and the like it would be far worse for the economy to have these people homeless and incomeless than to raise taxes and pay social security or welfare or the new idea of universal basic income.

Someone who can't buy goods and services and thus pay taxes is a far greater negative to society than the cost of social security and welfare. People who tend to think that you can get rid of these programs tend to not understand the economics of these programs are actually a positive for society. It will likely be the wealthier people paying for it because it far more productive to take cash from those with an excess and give it to those who will use it to consume to drive economic growth and health.

[RiverDog]

If social security runs out, we'll just end up like Europe with an immense welfare state and higher taxes. No politicians will allow the level of homelessness and poverty that would occur without some kind of retirement safety net in place. The economic devastation from allowing something like that would be immense sort of like no politician was going to let Americans starve during a global pandemic. Same psychology.

You'll either have social security or European style socialism. There is no alternative. People who are impoverished will revolt and vote it in. There are more people unable or unwilling to manage their money well for retirement with a vote than there are people who managed their money and finances well.

It's a pipedream of a certain group of conservatives that think they'll somehow force the majority to go without some kind of social safety net in place for retirement and general care. I know a lot of so called conservative folk who have managed their money like trash and will not survive without some kind of welfare state in place.

This is coming from someone who could survive without social security and would never use welfare. But given I understand economics, losing the consumption of people on social security or the welfare system with the number of taxes in place like property tax, sales tax, income tax, and the like it would be far worse for the economy to have these people homeless and incomeless than to raise taxes and pay social security or welfare or the new idea of universal basic income.

Someone who can't buy goods and services and thus pay taxes is a far greater negative to society than the cost of social security and welfare. People who tend to think that you can get rid of these programs tend to not understand the economics of these programs are actually a positive for society. It will likely be the wealthier people paying for it because it far more productive to take cash from those with an excess and give it to those who will use it to consume to drive economic growth and health.

If you take a look at the historical birth rate in this country, the peak occurred in 1957 with 25.3 births/thousand and has been on a steady downward trend ever since. Today, that rate is just 12.3 per thousand. In addition, life expectancy seems to have peaked at 78.9 in 2014 and has hovered at that rate until 2020 when there was a sharp drop due to Covid.

Once the last of the baby boomer generation retires, between 2025 and 2030, the worker-to-retiree ratio should start to level off somewhat.
Although that's not going to solve the system's problems, it will stop the bleeding to some degree. That could change if they come up with some type of breakthrough drug that extends life expectancy into the 80's, but that doesn't seem likely.

Although I think your scenario is quite possible, at least in the long term, I don't think we're there yet. They can still make relatively painless cuts in the system and extend it a few more years. The other thing that they can do is admit more immigrants, placing a priority on younger immigrants in their 20's and 30's, that would contribute to the system for 30 or 40 years in order to offset the declining birth rate and help solve the labor shortage.

[Aseahawkfan]

If you take a look at the historical birth rate in this country, the peak occurred in 1957 with 25.3 births/thousand and has been on a steady downward trend ever since. Today, that rate is just 12.3 per thousand. In addition, life expectancy seems to have peaked at 78.9 in 2014 and has hovered at that rate until 2020 when there was a sharp drop due to Covid.

Once the last of the baby boomer generation retires, between 2025 and 2030, the worker-to-retiree ratio should start to level off somewhat.
Although that's not going to solve the system's problems, it will stop the bleeding to some degree. That could change if they come up with some type of breakthrough drug that extends life expectancy into the 80's, but that doesn't seem likely.

Although I think your scenario is quite possible, at least in the long term, I don't think we're there yet. They can still make relatively painless cuts in the system and extend it a few more years. The other thing that they can do is admit more immigrants, placing a priority on younger immigrants in their 20's and 30's, that would contribute to the system for 30 or 40 years in order to offset the declining birth rate and help solve the labor shortage.

I'm pretty certain you're not one of the conservatives that thinks social security is going bankrupt because some "expert" sold them on this idea when it isn't going to happen. Just like some people think America is going bankrupt without ever asking the question, "How does that occur? And what is debt? Who is it owed to? How can it be managed? Is anyone in the world economy interested in a bankrupt America?"

There are these guys like Peter Schiff. They believe in unregulated capitalism to fix everything. They are constantly stating that America is going bankrupt and the dollar is worth nothing. The crypto followers have latched on to this belief as well to promote crypto. They read books like "The Monster from Jekyll Island" and such claiming the creation of The Fed was some plot by wealthy folks to take money from everyone.

It's similar to environmentalism in that it sets dates, then when it misses those dates it sets new dates creating a constant state of fear of economic collapse and relies on the readers inability to understand economics in the same environmentalism relies on the of lack knowledge about history and the nature of climate change science to push it's constant state of fear mongering which will keep up until we shift to EVs and alternative power when the economic incentive for this fear mongering will become a smaller and smaller group that keeps changing the dates.

Similar type of idea. I don't imagine you look too heavily into either of those circles and their crazy Armageddon philosophies other than the normal level a sensible person might agree with like cleaner air is better for us all and some fiscal responsibility is necessary.

[mykc14]

The number of people who would end up on welfare or homeless if not for Social Security would be immense. Social security isn't going away even if they have to keep boosting taxes. No idea why this keeps getting pushed out there as it will never happen. There is not enough votes among the American people to make this happen. Even the Republicans would lose huge support trying to get rid of social security. If anything, social benefits are going to expand over time, not shrink due to how The Fed manages the economy creating an economy where working people are punished for being wage earners and asset purchasers which are mostly the wealthy are going to create a haves and have nots society which is going to lead to European style social services as Americans have no choice but to turn to the government to equalize the bad money management by The Fed and government.

I don't think it will run out or go away, I think we will continue to increase taxes, increase penalties for drawing early/the age when we can start taking it out. Personally, I see it as any other form of welfare- I don't mind if for people who need it, especially if there is some sort of investment (a future contribution to society- like financial aid for college). Obviously Social Security is sort of the opposite of that. It takes care of people who have hopefully been contributing members of society for long periods of time. I am glad that it is there for my elderly family members, but like your last sentences states- I don't like the idea of government control of that money because of their historic bad money management. I started to prepare for my retirement in my 20's. I would much rather use the money I am paying for SS towards my own retirement. Many people believe they will have enough in their pension combined with Social Security to retire. If they weren't counting on a SS check maybe they would put more money towards their retirement.

[mykc14]

Mykc, you are wise not to plan on Social Security being around. Especially with the way inflation is going, it's unlikely that benefits will be able to keep pace. It was never meant to be the sole means of retirement income. Personally, I'm delaying taking my benefit until I turn 70 so as to maximize my monthly benefit, ie 132% of my 'full retirement amount'. Since mine is the higher benefit of the two of us, we're maximizing it as if I die before my wife, she gets the larger of the two for the rest of her life. In addition to allowing the monthly benefit to grow, delaying it allows us to keep our income low and transfer more money from traditional IRA's that we owe taxes on to a Roth and pay taxes on it at 12% vs. 22% if I were taking my SS benefit.

Too many people look at Social Security as an accountant would, in other words, trying to get the maximum amount out of it. I look at it as insurance against running out of money. I don't need it now so I'll wait to take it. Delaying it allows the benefit to grow by 8% a year.

Yes, I think this is a smart way to view your SS. Also, I am sure it is comforting for you to know that it is there, just in case. I also know that it is the only thing keeping some people in their homes. I also see it a bit like minimum wage. The purpose of minimum wage shouldn't be for you to be able to survive. It should be enough for you to survive for awhile while you increase your skill in that area or learn a skill that will sustain a survival/thriving wage. Retirement shouldn't be scrapping by on SS checks, yet with the SS system that is what many people are forced to do. The goal should be to educate people and set up cultural, systematic values centered on preparing for your retirement and only if that doesn't work have the government step in and help.

[Aseahawkfan]

I don't think it will run out or go away, I think we will continue to increase taxes, increase penalties for drawing early/the age when we can start taking it out. Personally, I see it as any other form of welfare- I don't mind if for people who need it, especially if there is some sort of investment (a future contribution to society- like financial aid for college). Obviously Social Security is sort of the opposite of that. It takes care of people who have hopefully been contributing members of society for long periods of time. I am glad that it is there for my elderly family members, but like your last sentences states- I don't like the idea of government control of that money because of their historic bad money management. I started to prepare for my retirement in my 20's. I would much rather use the money I am paying for SS towards my own retirement. Many people believe they will have enough in their pension combined with Social Security to retire. If they weren't counting on a SS check maybe they would put more money towards their retirement.

The welfare state is coming. The poor management of the economy over the years has made this inevitable, not to mention the lack of financial education in schools, market volatility, multiple economic collapses, and the growing technology gap where you're going to have people who use technology easily and those who can't fathom it.

Right now if you have the coin you can buy algorithmic programs becoming more and more affordable capable of automating your trading in the stock market to make money off small movements in the prices of stocks. Those who can use and harness this technology generally with a lot of money will thrive, while those who cannot will become frustrated by market price movements and likely be turned off from investing.

The money management with interest rates allowing people with money to leverage cheap borrowing to purchase assets like property and stocks driving prices up to unaffordable levels for wage earners has been detrimental.

It's all going to eventually require government remediation that will require a larger and larger role by people that are driven by ideology over practical economics which will lead to an even greater welfare state. America is a badly managed nation right now.

And yet still one of the best managed nations in the world given the size of the population. Which means many other nations are run far worse than America.

[RiverDog]

Yes, I think this is a smart way to view your SS. Also, I am sure it is comforting for you to know that it is there, just in case. I also know that it is the only thing keeping some people in their homes. I also see it a bit like minimum wage. The purpose of minimum wage shouldn't be for you to be able to survive. It should be enough for you to survive for awhile while you increase your skill in that area or learn a skill that will sustain a survival/thriving wage. Retirement shouldn't be scrapping by on SS checks, yet with the SS system that is what many people are forced to do. The goal should be to educate people and set up cultural, systematic values centered on preparing for your retirement and only if that doesn't work have the government step in and help.

Yeah, delaying my SS benefit is really comforting to my wife. She is a lot more conservative of a spender than I am, and when I make a big purchase, I can always tell her that I still haven't started drawing on my SS. My wife is drawing her SS benefit, so between the two of us, SS makes up about 1/3 of our monthly income, the rest coming from my pension, an annuity, and IRA withdrawals. But we don't have a house payment, so that makes a huge difference. We paid off our house nearly 10 years before we retired and plan to live here until we can't keep up the place then started doing things like replacing the roof, replaced our heat pump/air handler, both of us bought new cars and paid them off, all before we retired.

10-4 about the minimum wage, which is almost completely irrelevant in today's labor market. I've always maintained that if you're a healthy, functioning adult and the best you can do is a minimum wage job, something else is wrong with you that a couple bucks more an hour ain't gonna fix. Those jobs should never be thought of as sufficient to raise a family on. They should be thought of as entry level or training jobs, transitional between jobs, extra income or 2nd jobs, or retirement income jobs. But now, the job market is so wide open that places like WalMart and Target are paying starting wages nearly as much per hour as my wife was making as a certified nurse just 5 years ago.

[Aseahawkfan]

Is property in your area going insane, Riverdog?

[RiverDog]

Is property in your area going insane, Riverdog?

Yeah, the real estate market is hot, has been for some time. The vacancy rate is really low, only about 2% last time I saw, even though they're building tons of apartments, and there's no 'move in specials' like you normally see when they open a large, 500+ unit complex. The average time a house is on the market is 16 days. Amazon is building not one, but two warehouses each over a million square feet and some of the largest in the nation and will employ around 1500 workers. Unemployment in all of eastern Washington last November was 3.4%. Recently, home inventories in the Tri Cities area has increased some, to around 400...it was over 1,000 when I moved here in 1989 when the population was a lot less.... and median prices have leveled out some at about $400k, but that's going to change once Amazon starts hiring. My former employer is giving $1500 sign on bonuses for unskilled and semi skilled work and still has to hold job fairs to sell people on their company.

And to give you an idea of how the economy in this area is going, Costco is building a 2nd warehouse over in Pasco as the one in Kennewick is so crowded it's a challenge to find a parking spot even in mid week.

[RiverDog]

Inflation is now up 7.9%, and it's going to get worse before it gets better. I wouldn't be surprised to see it hit double digits soon. Obviously, it's due in large part to Russia's invasion of Ukraine, but it's not the only factor.

Inflation rose 7.9% in February, as food and energy costs push prices to highest in more than 40 years

https://www.cnbc.com/2022/03/10/cpi-inf ... 2022-.html

[mykc14]

Inflation is now up 7.9%, and it's going to get worse before it gets better. I wouldn't be surprised to see it hit double digits soon. Obviously, it's due in large part to Russia's invasion of Ukraine, but it's not the only factor.

Inflation rose 7.9% in February, as food and energy costs push prices to highest in more than 40 years

https://www.cnbc.com/2022/03/10/cpi-inf ... 2022-.html

Yeah, it's not good and its definitely going to get worse (although it doesn't HAVE to). Currious as to why you think it is "obviously due in large part to Russia's invasion of Ukraine." Wasn't it 7.4 or 7.5% before the invasion? Even with the invasion of the Ukraine if we were to use our oil inflation wouldn't be nearly as high as it is going to get so I would argue that a large part of our inflation issue has more to do with our governments refusal to tap into our own resources than it does with Russia and the Ukraine.

[Aseahawkfan]

Yeah, it's not good and its definitely going to get worse (although it doesn't HAVE to). Currious as to why you think it is "obviously due in large part to Russia's invasion of Ukraine." Wasn't it 7.4 or 7.5% before the invasion? Even with the invasion of the Ukraine if we were to use our oil inflation wouldn't be nearly as high as it is going to get so I would argue that a large part of our inflation issue has more to do with our governments refusal to tap into our own resources than it does with Russia and the Ukraine.

It does have to happen sadly. The Fed and the government won't tell you directly, but they don't have a choice due to the amount of debt they have accumulated. The debt level has increased to too high a percentage of the GDP due to a combination of excessive spending, tax cuts, and general fiscal mismanagement which has led to excessive borrowing which caused The Fed to print a lot of money and engage in inflationary policy to support the economy during the pandemic which is coming back to bite us.

Simple article on why inflation is good for the government if you look at the government as one of the most irresponsible and debt laden entities out there:

https://theintercept.com/2021/11/10/inflation-economy-debt-milk-prices/

Supposedly it is good for Americans as well, but not really if you're a wage earner as your wages likely will not keep up with inflation for years. It's good for wealthy people who own lots of assets that will increase with inflation and whose income derives from selling and passing on the cost of inflation to the consumer.

[mykc14]

It does have to happen sadly. The Fed and the government won't tell you directly, but they don't have a choice due to the amount of debt they have accumulated. The debt level has increased to too high a percentage of the GDP due to a combination of excessive spending, tax cuts, and general fiscal mismanagement which has led to excessive borrowing which caused The Fed to print a lot of money and engage in inflationary policy to support the economy during the pandemic which is coming back to bite us.

Simple article on why inflation is good for the government if you look at the government as one of the most irresponsible and debt laden entities out there:

https://theintercept.com/2021/11/10/inflation-economy-debt-milk-prices/

Supposedly it is good for Americans as well, but not really if you're a wage earner as your wages likely will not keep up with inflation for years. It's good for wealthy people who own lots of assets that will increase with inflation and whose income derives from selling and passing on the cost of inflation to the consumer.

Yeah, I probably should have said it doesn't have to happen at this high of a rate. There was no doubt that inflation was going to increase at a higher rate than ideal when we started giving out money early on in the pandemic. Biden's domestic oil policies ensured that inflation would increase even higher and now the war with the Ukraine is going to do the same. We could mitigate some of that inflation with policy changes. There is no doubt the choices our political leaders made during the pandemic (whether you agree with their necessity or not) was going to increase inflation. I don't know if anybody watches Futurama or not but there was a pretty funny episode where everybody in America was given $300 tax rebate. They all run around thinking they are rich, and a couple of guys are sitting outside of a 99 cent store, excited to use their $300 then the store immediately changes to a $299.99 store. Anyway, small incremental, steady inflation is good but when you start printing money it almost always comes back to bite you in the ass and that is where we are now, which is why we need to mitigate it as much as possible.

[RiverDog]

Inflation is now up 7.9%, and it's going to get worse before it gets better. I wouldn't be surprised to see it hit double digits soon. Obviously, it's due in large part to Russia's invasion of Ukraine, but it's not the only factor.

Inflation rose 7.9% in February, as food and energy costs push prices to highest in more than 40 years

https://www.cnbc.com/2022/03/10/cpi-inf ... 2022-.html

Yeah, it's not good and its definitely going to get worse (although it doesn't HAVE to). Currious as to why you think it is "obviously due in large part to Russia's invasion of Ukraine." Wasn't it 7.4 or 7.5% before the invasion? Even with the invasion of the Ukraine if we were to use our oil inflation wouldn't be nearly as high as it is going to get so I would argue that a large part of our inflation issue has more to do with our governments refusal to tap into our own resources than it does with Russia and the Ukraine.

A half percent jump in the rate of inflation in one month is pretty significant. If that rate of increase were to be sustained throughout the year, we'll be at 12-13% by this time next year.

Tapping into our own oil resources would have helped and is something I fully support, but we'd still be seeing significant increases at the pump due to the Russian invasion of Ukraine. Most of our variable domestic oil production comes from fracking, which is an expensive process that's labor and equipment intensive that takes time to ramp up and isn't very profitable when oil is under $70/barrel. Besides, oil is a commodity traded on the world market so the price charged by producers in this country are reflective of that which is sold by international producers. We both export as well as import oil.

[mykc14]

A half percent jump in the rate of inflation in one month is pretty significant. If that rate of increase were to be sustained throughout the year, we'll be at 12-13% by this time next year.

Tapping into our own oil resources would have helped and is something I fully support, but we'd still be seeing significant increases at the pump due to the Russian invasion of Ukraine. Most of our variable domestic oil production comes from fracking, which is an expensive process that's labor and equipment intensive that takes time to ramp up and isn't very profitable when oil is under $70/barrel. Besides, oil is a commodity traded on the world market so the price charged by producers in this country are reflective of that which is sold by international producers. We both export as well as import oil.

Yeah .5% a month over the course of a year would be 6%. I agree it's a lot but it's actually lower than our pace over the previous 12 months. At any rate there is no doubt the Russian invasion is going to increase inflation more than it would otherwise, but we should be trying to mitigate it as much as possible. I agree that domestic oil production wouldn't completely alleviate the issue, but it would help. The reality is that Biden's domestic oil policy exacerbated our countries economic issues a year ago and now it is worse. It was foolish then, especially given the state of our country at the time and it really looks bad now. I agree it takes a while to ramp up, but last December it was ramped up already. Biden has been talking about the fact that oil companies can drill on Federal Land but it there is a ton of red tape. An example is that it takes an average of 140 days to get drilling permits now to drill on Federal Land compared to 2 days for state land in Texas. Banks and individual investors are penalized for investing in non-green energy. I agree, large oil companies won't drill for under $70 (or more in many cases) but there are many smaller companies who would if they had the capital but can't get a loan due to those penalties. At the end of the day we need to (both parties, as a country) look past the typical political issues that divide us and start working towards fixing our immediate issues. As we see minimum wage and things like that go up we will see inflation continue to increase. We are at the beginning of a bad cycle.

[RiverDog]

Yeah .5% a month over the course of a year would be 6%. I agree it's a lot but it's actually lower than our pace over the previous 12 months.

At any rate there is no doubt the Russian invasion is going to increase inflation more than it would otherwise, but we should be trying to mitigate it as much as possible. I agree that domestic oil production wouldn't completely alleviate the issue, but it would help. The reality is that Biden's domestic oil policy exacerbated our countries economic issues a year ago and now it is worse. It was foolish then, especially given the state of our country at the time and it really looks bad now. I agree it takes a while to ramp up, but last December it was ramped up already. Biden has been talking about the fact that oil companies can drill on Federal Land but it there is a ton of red tape. An example is that it takes an average of 140 days to get drilling permits now to drill on Federal Land compared to 2 days for state land in Texas. Banks and individual investors are penalized for investing in non-green energy. I agree, large oil companies won't drill for under $70 (or more in many cases) but there are many smaller companies who would if they had the capital but can't get a loan due to those penalties. At the end of the day we need to (both parties, as a country) look past the typical political issues that divide us and start working towards fixing our immediate issues. As we see minimum wage and things like that go up we will see inflation continue to increase. We are at the beginning of a bad cycle.

Agreed. I understand the need to move away from fossil fuels, but the fact is that the internal combustion engine is going to be around for a long, long time, and as this past month has shown, we're still heavily reliant on a robust supply of crude oil.

And don't get me started on renewable energy. Our governor is shoving down our throats a wind energy project that would erect 250 wind turbines along our skyline that are taller than the Space Needle even though the vast majority of local residents are against it, while at the same time, advocating the removal of the lower Snake River dams that are producing the cheapest and cleanest energy in the country and would cost many billions of dollars to breach without any assurance that they'd do a damn thing to help restore salmon runs.

The Horse Heaven Wind Project is expected to erect up to 250 Space Needle-sized turbines that could be as much as double the height as the current turbines in South Kennewick. The project is also expected to take up land that is similar in size to the city of Seattle. Over 80% of the population is against the project.

And people wonder why the eastern half of the state wants to break off from western Washington.

Read more at: https://www.tri-cityherald.com/opinion/ ... rylink=cpy

The minimum wage is almost completely irrelevant. No one pays minimum wage anymore. Amazon's starting wage, the same company that AOC characterizes as paying "starvation wages", is $18/hr. Costco's is $17/hr. Target just announced that it is raising theirs to $24/hr for some starting positions. This is in the retail industry, a sector that traditionally pays low wages. Even McDonald's starting pay is $16-17/hr. We're already in an inflationary spiral.

[Aseahawkfan]

Minimum wage never works. I still don't know why people support it. It's a rotten policy. These same people who keep supporting the minimum wage never ask themselves, "We have had a minimum wage for decades and it has done nothing to fix the income equality gap or provide a living wage. It just adds to inflation because people making the same wage competing for the same goods and services just make them cost more which defeats the purpose of the minimum wage." It's a testament to why Democrats don't support economic education for citizens. It would make them oppose many of their economic policies because they are bad policies that lead to bad outcomes.

They would be far better off capping the wage levels of Americans and creating a wage bracket, so the gap between wage levels did not lead to such a huge gap in the cost of goods and services.

[RiverDog]

Minimum wage never works. I still don't know why people support it. It's a rotten policy. These same people who keep supporting the minimum wage never ask themselves, "We have had a minimum wage for decades and it has done nothing to fix the income equality gap or provide a living wage. It just adds to inflation because people making the same wage competing for the same goods and services just make them cost more which defeats the purpose of the minimum wage." It's a testament to why Democrats don't support economic education for citizens. It would make them oppose many of their economic policies because they are bad policies that lead to bad outcomes.

They would be far better off capping the wage levels of Americans and creating a wage bracket, so the gap between wage levels did not lead to such a huge gap in the cost of goods and services.

There does need to be a minimum wage or else there would be some unscrupulous employers that would exploit indigent, handicapped, immigrants, etc. But it should never be considered a living wage designed to support a family. Even if you can't speak a word of English and have no skills other than being physically able to work and follow rudimentary directions like a demonstration, you can get a $15/hr job with decent benefits.

I could see linking a minimum wage to a certain percentage of the median wage, but I'm not sure that I want to cap wages or have any kind of structured wage brackets. A worker should get paid what the market will bear.

[mykc14]

Agreed. I understand the need to move away from fossil fuels, but the fact is that the internal combustion engine is going to be around for a long, long time, and as this past month has shown, we're still heavily reliant on a robust supply of crude oil.

And don't get me started on renewable energy. Our governor is shoving down our throats a wind energy project that would erect 250 wind turbines along our skyline that are taller than the Space Needle even though the vast majority of local residents are against it, while at the same time, advocating the removal of the lower Snake River dams that are producing the cheapest and cleanest energy in the country and would cost many billions of dollars to breach without any assurance that they'd do a damn thing to help restore salmon runs.

The Horse Heaven Wind Project is expected to erect up to 250 Space Needle-sized turbines that could be as much as double the height as the current turbines in South Kennewick. The project is also expected to take up land that is similar in size to the city of Seattle. Over 80% of the population is against the project.

And people wonder why the eastern half of the state wants to break off from western Washington.

Read more at: https://www.tri-cityherald.com/opinion/ ... rylink=cpy

Very frustrating. Wind turbines are not very efficient (20-30%) and need to be replaced every 15-20 years. Many people like the idea of 'Green Energy' without really realizing that the projects aren't cost effective, efficient, or sustainable in the long-term. Dams and nuclear power are far more efficient, sustainable, and cost effective. I am all for green energy but lets work harder at perfecting the science before we make widespread changes like the one you are talking about. How much of our energy do we give to other states like California? We are one of the largest exporters of energy in the country and that is due to our dams and nuclear power. Getting rid of those forms of energy will lead to an energy crisis for many states.

[RiverDog]

Agreed. I understand the need to move away from fossil fuels, but the fact is that the internal combustion engine is going to be around for a long, long time, and as this past month has shown, we're still heavily reliant on a robust supply of crude oil.

And don't get me started on renewable energy. Our governor is shoving down our throats a wind energy project that would erect 250 wind turbines along our skyline that are taller than the Space Needle even though the vast majority of local residents are against it, while at the same time, advocating the removal of the lower Snake River dams that are producing the cheapest and cleanest energy in the country and would cost many billions of dollars to breach without any assurance that they'd do a damn thing to help restore salmon runs.

The Horse Heaven Wind Project is expected to erect up to 250 Space Needle-sized turbines that could be as much as double the height as the current turbines in South Kennewick. The project is also expected to take up land that is similar in size to the city of Seattle. Over 80% of the population is against the project.

And people wonder why the eastern half of the state wants to break off from western Washington.

Read more at: https://www.tri-cityherald.com/opinion/ ... rylink=cpy

Very frustrating. Wind turbines are not very efficient (20-30%) and need to be replaced every 15-20 years. Many people like the idea of 'Green Energy' without really realizing that the projects aren't cost effective, efficient, or sustainable in the long-term. Dams and nuclear power are far more efficient, sustainable, and cost effective. I am all for green energy but lets work harder at perfecting the science before we make widespread changes like the one you are talking about. How much of our energy do we give to other states like California? We are one of the largest exporters of energy in the country and that is due to our dams and nuclear power. Getting rid of those forms of energy will lead to an energy crisis for many states.

Not only that, but there are other areas of the country where wind energy makes more sense, like the east slopes of the Rockies in Wyoming, Colorado, Montana, New Mexico, etc. Washington ranks just 24th in on shore wind potential. Plus the farm has a huge footprint, they have to link them all up to the grid, there's environmental concerns, and they're not reducing our reliance on fossil fuels as this region gets most of its power from hydroelectricity and the nuke at Hanford. They're also not much good during our peak periods as the wind seldom blows much when it's 100+ or -10.

But the biggest problem is Inslee disregarding the people's wishes. When was the last time there was over 80% agreement on anything?

[Aseahawkfan]

There does need to be a minimum wage or else there would be some unscrupulous employers that would exploit indigent, handicapped, immigrants, etc. But it should never be considered a living wage designed to support a family. Even if you can't speak a word of English and have no skills other than being physically able to work and follow rudimentary directions like a demonstration, you can get a $15/hr job with decent benefits.

I could see linking a minimum wage to a certain percentage of the median wage, but I'm not sure that I want to cap wages or have any kind of structured wage brackets. A worker should get paid what the market will bear.

The minimum wage doesn't accomplish this. It's an unnecessary policy that creates a floor on wages for unscrupulous employers to pay people that doesn't work. It's like permission to pay everyone this amount that is considered a minimum wage implying minimum wage to live and that is not what it does. It instead creates a situation where employers pay a crap wage that meets the legal standard and yet leads to the same outcomes if unscrupulous employers were paying them a low wage. So I'm not real sure why you think a minimum wage is necessary to stop unscrupulous employers. What exactly do you think this minimum wage does if it is not a living wage?

You may not like wage brackets, but it is literally the only way to create a situation where the market has parameters that prevent abuse of wealth, which is what we have. It's not going to stop unless you bracket wages. If you have a certain number of jobs paying a certain wage say 40,000 a year, they are never going to be able to compete in a market paying some other person 200,000 a year, five times what they earn. These are just example numbers, but as long as you have people who have excess wealth they can use to purchase assets that grow in value who do not have any reason to care about a guy making minimum wage which is 31,200 at 15 an hour, then you're never going to solve the income equality issue which leads to these policies to begin with.

Income equality primarily exists due to the compounding effect of wealth. The more you have, the more you can buy and earn. The more your wealth grows. It's like making 10% on 30,000 is a 3,000 gain where as 10% on 3 million is 300,000. You will never fix this issue with a policy focusing on minimum wage if you don't cap the upper end.

I know most people won't support this. So it will continue to wealth distribution with taxes and inefficient social programs because that's the main other way to accomplish the same thing.

Current monetary and fiscal policy does not support wage earners very well. As long as The Fed focuses on low interest rate policy during times of fiscal distress, this is all going to keep happening. Eventually the voter will have little choice but to vote for higher taxes and government social programs the more these bubbles pop transferring wealth from the bottom to the top.

[RiverDog]

Here's another warning about the labor shortage and how it's affecting inflation and reflects my concern that we've let the inflation genie out of the bottle:

The Labor Department reported Friday that the unemployment rate fell more than analysts had predicted in March to 3.6 percent, a hair above its February 2020 level of 3.5 percent, while the economy added 431,000 jobs in the month.

"Today's job report is great news as it means the economy has almost fully recovered from the blow caused by the pandemic," Mark Zandi of Moody's Analytics wrote on Twitter. "But it is somewhat disquieting in that the job market must cool off quickly, or inflation, our number one economic problem, will soon be a much bigger one."

A jobless rate of under 4% is essentially zero as there's always going to be a certain percentage of people on temporary layoff, like construction workers, or those that are transitioning from one job to another. But it only includes those that are eligible for benefits and that are actively looking for work, and doesn't address the long term or chronically unemployed.

This ties into our discussion on homelessness as it is proof positive that there is plenty of work available for any healthy, functioning adult that wants to work, ie 'real' unemployment, which generally runs 5-10% above the reported unemployment.

The U-6 real unemployment rate is a broader definition of unemployment than the official U-3 rate. The U-6 was 7.2% in February 2022, just up from the rate of 7.1% seen in January 2022. This only slightly disrupts the overall downward trend that began in December of 2020. It still marks a vast improvement from the 22.9% rate in April 2020 that was close to the record unemployment rate of 25.6% set in May 1933.

https://www.thebalance.com/what-is-the- ... te-3306198

There's a good discussion on how they calculate the 'real' unemployment rate, referred to here as U-6, in the linked article.

[RiverDog]

Here's a good example of what I'm worried about regarding the current labor shortage.

Last year, wages rose 5.6%, an otherwise healthy bump that a lot of people can celebrate. However, these high wages are one of the major causes of an annual inflation rate of 7.0% for 2021, so that wage increase was completely swallowed up by higher prices.

It's the same conundrum that I went through early in my working career in the late 70's. I'd get a decent raise only to see it completely swallowed up by higher prices. Unless you change jobs to a higher paying one, you can never keep up. It took some pretty drastic measures to put the genie back in the bottle, measures that may not be available this time around

Seniors on fixed income are being hit even harder. Social Security recipients were given a 5.9% increase in 2022, but they also raised the monthly Medicare Part B premiums by 14.5%, from $148.50 to $170.10 for my wife and I, reducing the effective SS raise to 4.4%. Plus a lot of the things that seniors are more likely to buy, like drugs and energy, have risen faster than the overall inflation rate. Pensions that many retirees depend on for their income remain fixed regardless of the rate of inflation, hence the term "fixed income."

A lot of people, mostly my short sighted liberal friends, interpret my stance on wages as being hostile towards the common American worker. After all, I have been in management positions for most of my working career, so it's only natural to make that assumption. But nothing could be further from the truth. A lot of workers, especially those that have invested 10+ years in the same position with the same employer and with deep roots sunk into their communities, don't have the ability to chase new jobs to keep their income up. The common, lower to middle class worker, minorities, etc, as they do in almost any crisis, tend to suffer more due to inflation than their middle and upper class counterparts. That's why I'm always skeptical about calls for raises in the minimum wage and why I was against all but the first economic stimulus payment as they weren't needed and were inflationary. Those chickens are now coming home to roost.

Friday’s report showed average hourly earnings rose 0.4% from February and 5.6% from a year ago, the most since May 2020. However, inflation -- at the highest since the early 1980s -- is outpacing wage growth, effectively dealing a pay cut to many Americans and starting to dent consumer demand.

https://www.msn.com/en-xl/money/markets ... 779c080d2e

[Aseahawkfan]

It is basic economics even starting students learn when taking an economics class to pass on any increase in costs including labor costs by increasing the price as long as the good or service you're selling has sufficient price elasticity to allow you to do so. This is why I never get Democratic polices with the minimum wage when even a basic economics student taking a class in Community College would learnt to pass on an increase in labor costs from an increase in the minimum wage to the consumer by increasing prices to maintain margins which just ends up eating up any pay increases from the minimum wage and makes the cost of goods and services more expensive for everyone. It also makes taxes more expensive since taxes are generally percentage based, which increases revenues for the government since they end up having to pay more due to inflation as well. Even the government has set up taxes so that they when inflation occurs, even the government increases the amount of taxes you owe thus further inflating the cost of goods and services. Since Democratic states tend to have more taxes than Republican states, Democratic run states to increase the cost of living even higher on working people they claim to want to help with these policies.

When I was taking basic economics when younger and learned how businesses and any commercial entity including governments operate during inflation, it just made me move farther away from supporting Democrats. Their economic are completely against how the market works and often do more harm than good by just making everything more expensive for everyone. Then the Democrats give backdoor tax breaks to big business to keep them in state knowing that tax break policies and favorable tax environments that bring business to your state boost jobs, revenues, and the like. Then the Democratic supporters start with their usual talk of "This isn't fair" an the like and because Democratic supporters don't take economics class, they have no idea that their Democratic leaders are practicing intelligent economic polices so their followers can keep their jobs so the business won't move out of the state or country if their tax burden becomes non-competitive.

The Democrats are like the kings of saying one thing to appease their followers economically, while doing something else to appease big business and keep them in the state. Why do they do this? Because they have to follow economics as well and don't get to just vote in bad polices, have businesses pay for these bad policies, then stay in the state as they know their followers having no jobs is going to hurt their vote count more than giving big business tax cuts to stay.

It's crazy to me that Americans aren't taught economics in High School. Financial education would benefit American students far more than almost anything but math and English classes since they have to know that to function. Financial education is more important than history in my opinion. I think you would see a real change in how Americans vote if they all took economic classes and started to understand how market driven economies work and might lead to support for more intelligent polices like those that focus on improved standard of living than increases in the minimum wage or trying to increase taxes on the wealthy who already pay the lion share of taxes because paying 20% on a 100 million is still 20 million in taxes.

The argument that wealthy folk don't pay their taxes is a ridiculous one with no foundation in reality. The only reason people like Bernie Sanders and Elizabeth Warren can make hay from attacking the wealthy is because Americans don't learn economics in school. If they did, politicians like Sanders and Warren would be ridiculed more than they already are.

https://taxfoundation.org/publications/latest-federal-income-tax-data/#:~:text=The%20top%2050%20percent%20of,percent%20combined%20(29.2%20percent).

[RiverDog]

That's what I meant when I said that my liberal friends were short sighted.

Our focus should be more on providing everyone with an opportunity to be upwardly mobile, in other words, education and training. I've worked for employers that would pay the tuition for any approved night class or correspondence class that a FTE wanted to take and scholarships for their immediate family members to attend an accredited college or trade school. Rather than pushing things like minimum wage, which at this point is almost a completely irrelevant subject, the government should be encouraging employers, through tax breaks and other financial incentives, to make those types of programs available to their employees. Same thing with other benefits, like 401K's and health insurance. There's more to compensation than an hourly wage or getting your birthday off.

I hear what you're saying about the failure of our school system to teach basic economics, but it shouldn't take much of an education to figure out that if a business incurs additional costs that they will pass it along to the customer in the form of higher prices. It's the same thing with understanding that price is a function of supply and demand. It's a pretty easy concept. And you can include personal economics, ie personal finance, as well. I've mentored college graduates that don't understand the first thing about retirement savings.

But it's not just the Dems/libs that we should be beating up on. Many, if not most, conservatives can't seem to figure out that we need young, healthy workers to support our economy and the easiest and quickest way to increase our labor force, especially in those entry level, blue collar jobs that are in such demand, is to liberalize our immigration policies. They seem to have this subliminal fear of anyone that doesn't look or speak like them that causes them to buy into Trump's narrative that all immigrants are a bunch of drug runners and pimps out to steal their money and rape their women. They are so into this America First, jingoistic, isolationist movement that they can't understand global economics, can't understand the benefits of international trade, and are stuck in this post war world, ie 1945-1970 or so, when America could support herself solely on domestic production.

[Aseahawkfan]

That's what I meant when I said that my liberal friends were short sighted.

Our focus should be more on providing everyone with an opportunity to be upwardly mobile, in other words, education and training. I've worked for employers that would pay the tuition for any approved night class or correspondence class that a FTE wanted to take and scholarships for their immediate family members to attend an accredited college or trade school. Rather than pushing things like minimum wage, which at this point is almost a completely irrelevant subject, the government should be encouraging employers, through tax breaks and other financial incentives, to make those types of programs available to their employees. Same thing with other benefits, like 401K's and health insurance. There's more to compensation than an hourly wage or getting your birthday off.

I hear what you're saying about the failure of our school system to teach basic economics, but it shouldn't take much of an education to figure out that if a business incurs additional costs that they will pass it along to the customer in the form of higher prices. It's the same thing with understanding that price is a function of supply and demand. It's a pretty easy concept. And you can include personal economics, ie personal finance, as well. I've mentored college graduates that don't understand the first thing about retirement savings.

But it's not just the Dems/libs that we should be beating up on. Many, if not most, conservatives can't seem to figure out that we need young, healthy workers to support our economy and the easiest and quickest way to increase our labor force, especially in those entry level, blue collar jobs that are in such demand, is to liberalize our immigration policies. They seem to have this subliminal fear of anyone that doesn't look or speak like them that causes them to buy into Trump's narrative that all immigrants are a bunch of drug runners and pimps out to steal their money and rape their women. They are so into this America First, jingoistic, isolationist movement that they can't understand global economics, can't understand the benefits of international trade, and are stuck in this post war world, ie 1945-1970 or so, when America could support herself solely on domestic production.

Some liberals I talk to literally believe that businesses pass on the cost just to gouge them and do so in collusion, not because of changes in the market because of their lack of economic education. I explain this is a standard practice in business that will only not occur if price elasticity isn't present in a good or service. They do not accept this economic reality. They seem to have some strange idea that businesses should be in business for charity and should limit profits voluntarily. It's very strange.

Some want the government cheese even if that cheese is subsistence wages with no upward mobility or ability to build their life as they wish. They would prefer the security of government cheese over having to work for what they have.

It's all very odd. I can only surmise it is what is sold to them by whatever their preferred information source is. They can't pick up a book or learn the base information to determine how something works, then work within that framework for greater prosperity. Not sure how to get that mindset to change.

It seems that trying to invest and build wealth scares quite a few people because it seems difficult and requires a specialized education, when it really just requires some basic knowledge and the building of good habits with money.

[RiverDog]

Some liberals I talk to literally believe that businesses pass on the cost just to gouge them and do so in collusion, not because of changes in the market because of their lack of economic education. I explain this is a standard practice in business that will only not occur if price elasticity isn't present in a good or service. They do not accept this economic reality. They seem to have some strange idea that businesses should be in business for charity and should limit profits voluntarily. It's very strange.

Yeah, and high gas prices is the result of gouging by big oil executives, not the price of crude or the Russian invasion of Ukraine. There has to be a villain. Chit doesn't just happen. But the R's are just as bad, blaming Biden for the high gas prices.

I

t's all very odd. I can only surmise it is what is sold to them by whatever their preferred information source is. They can't pick up a book or learn the base information to determine how something works, then work within that framework for greater prosperity. Not sure how to get that mindset to change.

It seems that trying to invest and build wealth scares quite a few people because it seems difficult and requires a specialized education, when it really just requires some basic knowledge and the building of good habits with money.

Before we beat up on liberals too much, the same is true of many if not most conservatives, just that the subject is different. You will never get a wide breath of information if all you do is listen to either Fox or CNN.

Regarding building wealth, 30 some years ago, the company I worked for got bought out by another, so our former employer gave us a couple of options for our 401K's, either transfer it into our new employer's 401K, create a self directed IRA, or cash it out. I tried my best to convince our folks not to cash it out, that they would pay a 10% early withdrawal penalty plus have to declare it as income and pay tax on it, that it would likely bump them into a higher tax bracket, told them that I would help them find a financial advisor, I even had business cards for a bi-lingual one, but very few listened to me.

I was in HR when the box of envelopes with 401K distribution checks arrived and I watched the HR clerk mate the 401K checks with the employees bi weekly paycheck to be handed out the next pay period, and they were mating checks by about a 3 or 4 to one ratio. In other words, the vast majority had cashed out their 401K's. At 600-700 employees, I think I was getting a pretty fair sample of how Americans in general manage their money.

We are a country of stooges. You can't fix stupid.