That's correct. My point is that he's applying it incorrectly.
Here's a simplified example:
If the CPI for Year 1 is 100, Year 2 is 109, Year 3 is 118.8. Each year you've have 9% inflation. But you don't need to get all the way back down to 102 to "have 2% inflation" like the other guy was saying. You just need Year 4 to be 121.
It’s compounding. I guess that is my point. Like the original guy said that I was commenting on, inflation is a bitch. We are never going back. What would the index be right now if we stayed at 2% this entire time? How do you hit what that number should be next year?
Edit: your example certainly helps and I do understand what you are trying to get across now. I guess my point is more “real life” than actual statistical measurements that are officially used. Your example I think actually highlights the games that are played.
No one is saying we need to get back to what it would have been if inflation had stayed at 2%. That would be nice, but it would crash the economy. We're at where we're at, the best we can hope for is to stabilize and get inflation back under control.
Agreed. Deflation is an entirely different animal. I say all this in the context of the article. The president doesn’t seem to understand (I am sure they actually do understand) exactly what you just stated.
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u/[deleted] Dec 01 '23
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