Your opinion
Is a large amount of the inflation caused by 10 to 20% of the American public having a lot of disposable income to spend?
- Yes
- No
- No, only because taxes on the wealthy need to stay low
0 voters
1 Like
USian dogma says everything has to be rationed by ability to pay.
Dropped in to a Little Caesar’s for a veggie pizza for lunch $13. For years their headline product has been a $5 “hot and ready” pizza. I looked at the menu board today: $5.55.
A grilled chicken lunch combo at Wendy’s is $10.
But I can still get bachelor chow on sale 4 for $10.
Steve
5 Likes
Average US family income is $67,500/yr. Average US new car sales price $47,000.
I doubt the average family is buying the average car.
intercst
4 Likes
The average family has too high a tax burden.
The family looks one way and sees people with much less income not paying taxes and thinks about that…
The average family then looks to people making far more money than god and the averagers have some serious problems with the tax breaks for the wealthy.
2 Likes
I doubt the average family is buying the average car.
You are confusing average new car with average car.
About half of households buy used cars, which might be a few years old or might be 10+ years old.
So mostly the ~upper half, in terms of income, are buying the average new car.
Mike
1 Like
Used car inflation was up nearly 40 percent last year.
People who have to buy used cars are getting hit especially hard.
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I doubt the average family is buying the average car.
Over the years I bought the average car. Half were new and half were used. 
The Captain
Imbalance of supply to demand.
I recently posted on why real estate is so high and going higher, how the imbalance of supply and demand happened and why it’s not being resolved any time soon. https://discussion.fool.com/inflation-and-real-estate-35041271.a… Has everything to do with supply and demand being imbalanced and nothing to do with income. If there were more available units, people would not have to pay more for the limited supply. Same goes for the Pandemic supply chain disruption.
Somethings are not rocket science.
IP
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interst:"Average US family income is $67,500/yr. Average US new car sales price $47,000.
I doubt the average family is buying the average car."
The main reason for high new car prices is
-
Manufacturers are concentrating on top end cars and full option packages to sell the highest profit margin cars. Few cars at the low end are being made. Thus, the ‘average’ car is way above the ‘average car price’ of 2018 pre-Covid.
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Dealers are selling at or above MSRP, and adding on big option packages like rust proofing, paint protection, fabric protection - whether you want it or not for another couple thousand. (Wallet cleaning 101).
If you want a new car - that’s all the choices you have. Not too many low end cars to buy. Almost none to ‘lease’.
Those coming off lease are being ‘certified’ and sold for nearly the price of a new car…
My cars are OK. 2007 Prius with 55,000 miles and 2016 Chevy Malibu with 136,000 miles. Both should run a couple more years.
Used car prices are up 40% due to lack of ‘affordable’ new cars.
t.
My cars are OK. 2007 Prius with 55,000 miles
t
Prius batteries. At 15 years old.
(Noticed 55,000 miles =4,000 miles per year.)
Any comments re needing replacement(s)? Cost?
(Since new?)
Hard to keep charged?
Other?
The money supply in theory is backed by the GDP. The monetary policy for the last two years has been an open spigot.
That did not really go into much new supply. Yes there were major disruptions.
The bottom line you can not get blood from a rock. Meaning if the collective wallet has very little money there is very little inflation. If the collective wallet has a lot of money there is more inflation.
When money is printed there is inflation. The FED had been printing $120 per month and adding it for the bankers and other financiers.
Of course that is inflationary. Regardless of supply. Yes more supply would mean less inflation. That is why printing money is useful to grow supply, but you get marginal inflation with it.
None of this is directed at anyone in particular, it is the topic.
If the top tax break is getting most of the new money, their disposable income has risen. They will have the same nominal savings rate basically if not more.
Investment rose creating a greater wealth effect from the markets. More marginal inflation.
Taxes stayed relatively low…allowing the disposable income to cause rampant inflation.
1 Like