Inflation is only 2% because CPI is bullshit. CPI keeps getting changed so it would be 2%. There are no realistic housing options in there anymore, nor education, nor healthcare, nor ... and if you reinsert those inflation has never been below 4% per year.
While I've gotten above inflation pay rises, they have been exceptions (and due to exceptional performance, ie. usually more than 8h/day for quite a while).
Besides, it is very obvious that modern states and central banks are using inflation to minimize/eliminate the effect of debts on the actual economy. Given what has been going on, how can you realistically defend any other position?
Btw: given what has happened to these debts, you can safely bet your right arm that real inflation is going up to at least 5.3%. And that was before COVID-19 measures.
Not only is 2% a fairly tepid number, we’ve had to cut rates, make promises to “sustain the expansion”, stop the tapering of The Fed’s balance sheet just to get that 2%.
All throughout 2013-2017, the CPI number has hovered either close to 2% or been below it. Keep in mind that the Fed’s goal is symmetric, meaning that to make up for the times when CPI is below 2%, there needs to be other times when CPI is above 2%. It blows my mind that throughout the late 80s and 90s we were hitting anywhere from 3-5% and now we’re struggling to get 2%.
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