How hyperinflation really happens.
Yeah, we are so not Syria.
Matthew O’Brien highlights Syria’s hyperinflation:
It turns out you can’t have much of an economy when your country is a war zone, and the regime is attacking civilians. But functioning economy or not, the government still has to pay its bills. So what does it do when there’s nothing to run or tax? Easy: It prints what it needs. That’s what the pariah Assad regime has done to cover the difference between what it has to pay, and what its few remaining patrons have paid it. The predictable result of all this new money chasing fewer goods has been massive inflation.
This is in keeping with the history of hyperinflation:
Hyperinflations tend to happen following wars or revolutions. Now, Weimar Germany and Zimbabwe look like exceptions to this rule, but they’re not really – the former’s resistance to reparations, and the latter’s botched land reform halted economic activity as much as any conflict.
Matt Yglesias at Slate breaks down the (less) big city’s bankruptcy:
The basic reason Detroit needs to do this is pretty simple. In 1950 there were 1.85 million people in Detroit. In 1970, it was 1.5 million. In 1990, it was a million flat. By 2010, it was down to 710,000. When your city is shrinking like that, you end up with a tax base that’s inadequate to maintain the fixed infrastructure or to pay off pension costs that were incurred in more prosperous times.
Governing.com has an interactive map in the link showing all municipalities that filed for Chapter 9 bankruptcy protection since 2010, along with local governments that voted to approve a bankruptcy filing: http://www.governing.com/gov-data/municipal-cities-counties-bankruptcies-and-defaults.html
WaPo reports the progress on the bankruptcy filings:
The filing begins a one- to three-month process to determine whether the city is eligible for Chapter 9 protection and who may compete for the limited settlement money that Detroit has to offer. But it could be years before the city emerges from bankruptcy.
Also from WaPo, the impact on Detroit’s citizens:
Who gets hurt most?
Detroit is about $18 billion in debt, and will only be able to pay out a fraction of that in the short term. The two main groups of creditors arguing they’re entitled to that money are public employees and retirees, and bond holders. The investors are likely to make out better, since more of that debt is secured; the city will continue to pay water and sewer bondholders. Most of the pension debt has no similar backstop.
City residents will likely suffer a lack of anything other than the most rudimentary public services for a long time, but the impact is likely to be felt most keenly by those who lost a large chunk of the retirement they were counting on.
Tl;dr The cultural relevance and economic output of Detroit are both underwater and will continue to die. None of the journalists have the balls to say so, but I bet some of them are thinking, “Maybe we should let it die.”
Josh Barro is the only conservative columnist who has been able to give me pause and keep me engaged and thinking on Twitter. All my favorite libertarian columnists happen to be gay (Greenwald). Not sure what’s up with that.
Politics Editor at Business Insider. Crotchety young man. email@example.com
Joshua A. Barro is an American opinion journalist and the current politics editor at Business Insider… He has a bachelor’s degree in psychology from Harvard.
Time named Barro’s Twitter feed one of “The 140 Best Twitter Feeds of 2013”, one of ten in the Politics category. In 2012, Forbes selected him as one of the “30 Under 30” media “brightest stars under the age of 30,” and David Brooks listed him as part of the, “vibrant and increasingly influential center-right conversation.”
Barro describes himself as a neoliberal and a Republican, but has expressed opposition to many policies of the Republican party. He has been described by others as conservative, liberal and libertarian.
Barro lives in Queens, NY. His father is noted macroeconomist Robert Barro. Barro is openly gay and has written in support of gay marriage.
Paul Krugman discusses the “dependent upon government” citizens that Romney refers to in the now viral Mother Jones video inside a private donor meeting:
Actually, if you look at the facts, you learn that the great bulk of those who pay no income tax pay other taxes; also, many of the people in the no-income-tax category are (a) elderly (b) students or (c) having a bad year, having lost a job — that is, they’re people who have paid income taxes in the past and/or will pay income taxes in the future.
↓By the way, I don’t control WordAds content, so I’m sorry if you get finance investment firm ads.
Today, the Bureau of Labor Statistics released the latest Consumer Product Index (CPI) numbers, giving the most recent estimate of the rate of inflation. The short version: There isn’t any. The inflation rate for all products grew by a whopping 0.0 percent. When you exclude food and energy prices, as economists frequently do to get the “core” rate of inflation, inflation in July was just 0.1 percent. Indeed, inflation for the past 12 months was only 1.4 percent, well below the Federal Reserve’s target of 2 percent, and core inflation was only 2.1 percent.
My first post that ever got significant attention on the internet was “Fact Checking The National Inflation Association And its Hyperinflation Fear-Mongering.”
I actually wrote it as a response to the NIA video that I originally saw on my former boss’s Facebook wall. In hindsight, it’s probably not a good idea to post sarcastic blog posts on your former boss’s Facebook wall.
My style is more analysis-oriented than sarcasm-based these days, which is more boring, but more along the lines of the stuff I like to read. Hey, I was still right after two years. And Peter Schiff is still crazy.
Matt Ygelsias breaks it down at Slate:
Back in September 2001, annual per capita disposable income was $27,147, and a whole turkey cost $1.162 per pound. (None of these numbers has been adjusted for inflation, so as to isolate turkey inflation from larger price trends.)….
Here in the fall of 2011, per-capita disposable income is up to $37,088, but frozen turkey costs $1.676 per pound, meaning you could buy scarcely more than 22,000 pounds worth of whole frozen birds.
But even with the rising cost of Turkey in general, every November, Turkey demand goes through the roof and prices go down as classic capitalistic competition to snag the most customers ensues. Compared to the rest of the season, the actual cost now for Turkey should be about 10% cheaper, according to Yglesias.