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Comment by rjsamson | Hacker News Reader

Great article - mostly I'm amazed that there are folks out there who are supposed to be intelligent, who actually believe 10% inflation is a reality...

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I believe it because my food bill has increased approximately 50% in 3 years and gas prices are at the same level as during the bubble in 2008 but with a much more subdued economy. I don't understand how an article with an NGDP chart and some fancy hand waving negates this.

Can you refute the point that we can't have positive job growth and negative real GDP? Then how is overall inflation more than 2-3%?

It is easy. Fire one 40 hours worker. Hire thirty-nine 1 hour workers. Congratulations! You've increased your "labor force" by 3800% !!!

You have a net loss of 1 man-hour however. I'm not totally sure how this relates to inflation, but jobs absolute numbers and gdp are only slightly related.

Another example would be to fire everyone making more than 100k$/year and relocate them to potato farming. In terms of gdp, this would be a net decrease despite the absolute worker count remaining the same

Everybody's aim in an economy is not to have to work, or at least to work less, and to produce more. No one wants to work more and produce less. So what we want is negative jobs (people working less) with positive GDP (people enjoying more goods and services.)

In bad times, when there is a loss of productivity or where people stop working in the productive (private) sector and go to work for the unproductive (public) sector, you absolutely can have negative real growth with more employment.

As I mentioned in another comment, food and fuel are not counted when calculating inflation - they are both commodities whose prices are determined by external market forces (ie speculation, weather, etc) and do not accurately reflect rising prices due to monetary inflation. Inflation of a few percentage points is healthy - and that's where we are now. Any less and you begin to risk slowing economic growth - currency that declines in value slightly over time gives one the incentive to spend their cash, rather than hoard it.

To dismiss food and fuel is simply erroneous. There is a reason why governments push to have them removed from the inflation numbers... they have an economic incentive to lie and maintain their power.

it especially hurts the poor (both young poor and elderly, like those on social security.)

Now is a terrible time to have food as a large portion of your budget (ie: are poor)

Any time is a terrible time to have food as a large portion of your budget.

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