I swear I had Econ in college, but I don’t remember anyone saying this so succinctly. It’s from a weird place too, but this quote hits home. It’s like population decline, but for money.

It was a truly baffling thing for an American president to say. And University of Michigan economist Justin Wolfers explained on MSNBC that things could get very bad as Trump’s scheme becomes reality. Wolfers ntoed that the idea of how much you can afford to buy with your income is called “real income.” And if real income falls, that’s called a recession. Wolfers went on to explain that if things decline as badly as Trump’s example, where someone who bought 30 dolls could only afford to buy two dolls, that’s called a depression.

Video from MSNBC: https://www.youtube.com/watch?v=sAZxLm6M_V0

  • Hildegarde@lemmy.blahaj.zone
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    1 day ago

    TIL every year with a rent increase is a recession. Whenever housing prices increase faster than income that’s a recession. When college tuition goes up faster than incomes that’s a recession.

    • djsoren19@lemmy.blahaj.zone
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      21 hours ago

      correct.

      It seems like you’re really close to figuring out why a massive portion of the United States is willing to vote for anything as long as it’s not the status quo.

      • frezik@midwest.social
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        6 hours ago

        Even by this definition of recession, we’re not. Real wages are up since that time.

        Wages have not been keeping up with productivity increases. They’re going to billionaires, not the workers.

      • HubertManne@piefed.social
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        1 day ago

        pretty much. sometimes did not seem so since we racked up debt to offset. At one point it was considered unsustainable for a country to function with debt/gdp over 100%

        • frezik@midwest.social
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          6 hours ago

          That was a right-wing talking point in the years following 2008. After Bush had flooded the banks with money, Obama took office and suddenly Republicans decided they were fiscal conservatives again.

          The paper that said a debt/gdp ratio over 100% created a death spiral (I believe it was more like 125%) had a problem: nobody else could reproduce their results. Didn’t matter, Republicans had to remind people that Obama was a spend and tax liberal.

          Then an econ student asked the authors for their Excel spreadsheet (econ does everything in Excel; everything). He found a coding error in one of the formulas. Once corrected, the whole conclusion evaporated.

          • HubertManne@piefed.social
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            6 hours ago

            What im talking about goes back to when japan was predicted to go over. Japan was supposedly going to fall apart. Fact is that since reagan we have been running more and more on debt and less and less on income (taxes) and the longer we do so the more will need to tax in the future.