CEOs who receive billions in subsidies want to keep their subsidies, but cut Social Security and other welfare programs.

[Imran Siddiqui]

To be honest, I don't see there being that big of a deal if minimum wage is indexed for inflation. After all, if the point is a minimum wage, inflation, of course, eats away at how much that actually is in real money terms. If you don't like minimum wages at all, then it is understandable why you wouldn't want that (it, in effect, reduces the min wage). But if you are for it, an indexing to inflation is the only way to go.

[Ben Kenobi]

The unions may get a greater increase above and beyond with the increase in minimum wage, but non-union workers will still be far better off with the increased minimum wage.

Not if the vast majority of the benefit goes to the unions. Raise wages, and prices will follow. The working poor will be left behind, but the unions will be well off. Isn't that the purpose of a union to impoverish others?

Also, as I understand it, the way a minimum wage indexed to inflation would work, is that the minimum wage is to be increased along with the rate of inflation.

Given that inflation is a dependent variable, raising wages will lead to further inflation increases.

And I am much more in favor cutting subsidies for the wealthy and preserving welfare system for the poor because the poor are the ones who truly NEED assistance in order to live.

Are you willing to cut entitlements for everyone, Mr. Fun? Or just people you hate?

[Ben Kenobi]

To be honest, I don't see there being that big of a deal if minimum wage is indexed for inflation. After all, if the point is a minimum wage, inflation, of course, eats away at how much that actually is in real money terms. If you don't like minimum wages at all, then it is understandable why you wouldn't want that (it, in effect, reduces the min wage). But if you are for it, an indexing to inflation is the only way to go.

What does that do to savings if you add 3 percent on top of the inflation rate every year? This is bad economic policy, will stoke inflation and ensure poor people fall further behind. By definition it is impossible to index wages to inflation. Inflation will simply increase by however much you agree to increase wages.

[Imran Siddiqui]

What does that do to savings if you add 3 percent on top of the inflation rate every year? This is bad economic policy, will stoke inflation and ensure poor people fall further behind. By definition it is impossible to index wages to inflation. Inflation will simply increase by however much you agree to increase wages.

You do realize that things are indexed to CPI all the time, right (Government wages, for one, have usually, though not every year, had some linkage to inflation)? And that didn't lead to some hyperinflationary scenario.

[Ben Kenobi]

You do realize that things are indexed to CPI all the time, right?

Yes, and I think it's bad policy. What has been happening is the natural consequence, the government understates CPI ensuring that a gap emerges between the true inflation rate and what the government actually pays. This has the deletorious effect of ensuring that wages still fall behind inflation and we have higher inflation rates than we would have if the policy were scrapped.

If wages were permitted to rise and fall with demand, things would be much better.

[Imran Siddiqui]

FWIW, no less than Milton Friedman was in favor of indexing government wages to inflation.

Also, inflation rates in the US are still very low (Heck, we were worried about deflation a few years back), hence "higher inflation rates than we would have if the policy were scrapped" is not all that large a concern.

[Ben Kenobi]

FWIW, no less than Milton Friedman was in favor of indexing government wages to inflation.

I'm going to need a cite for that.

Friedman did argue that government spending should be reduced, and that cuts to entitlements were crucial for turning around the economy. He also believes that the role of the state should be drastically reduced from present.

[giblets]

I've done so many times in the past. It has always devolved into you repeating your DailyKos talking points, sometimes worded ever so slightly differently, which you then insist makes them fresh and interesting.

However boring MrFun may be, why is there so much vitriol directed at him? Is he anywhere near as annoying as BK?

[Ben Kenobi]

Also, inflation rates in the US are still very low (Heck, we were worried about deflation a few years back), hence "higher inflation rates than we would have if the policy were scrapped" is not all that large a concern.

Let me put it this way. Having public sector unions gain 10 percent increases in their wages, while the private sector has a net decrease, is unsustainable. Short term, you'll see prices increase. Long term - say 10 years or so, you'll see the fiscal collapse.

Increasing public sector union wages just hastens things.

[Imran Siddiqui]

Says the person decrying high inflation rates (what, compared to deflation?) based on what the US government already indexes to CPI.

[Ben Kenobi]

Says the person decrying high inflation rates (what, compared to deflation?) based on what the US government already indexes to CPI.

/me puts on short-term hat.

In the short term, you'll see inflation.

/me puts on long term hat.

Increasing public sector wages is about the worst thing, long term you could do. More government spending = more debt. More debt will eventually lead to deflation. Once the debt deflation is inevitable, we'll see the inflationary spiral finally hit. Just as in Weimar Germany.

The best thing the government could do is to stop fighting the deflation. Cut spending. Let the market crash. Let everything fall apart. It will suck short term, but this time next year, the government would have it's fiscal house in order and things would be better.

Also, no cite for Friedman?

[MrFun]

To be honest, I don't see there being that big of a deal if minimum wage is indexed for inflation. After all, if the point is a minimum wage, inflation, of course, eats away at how much that actually is in real money terms. If you don't like minimum wages at all, then it is understandable why you wouldn't want that (it, in effect, reduces the min wage). But if you are for it, an indexing to inflation is the only way to go.

Not having minimum wage indexed to inflation kinda defeats the purpose of having minimum wage.

[MrFun]

Yay! Middle class spending power is reduced via ensured inflation, until such time as they are caught up in the mandatory minimum wage net. Everyone is equal and lower class.

How is middle class spending reduced, if minimum wage is keeping pace with inflation by having minimum wage indexed to inflation? And how would this move the middle class down to the lower class? A significantly higher minimum wage would move the working poor up to the lower rung of the middle class.

[DaShi]

Hauldren Collider lacks the intellectual firepower to actually make a reasoned analysis of his own beliefs.

But you do parrot others well. So...

[regexcellent]

Not having minimum wage indexed to inflation kinda defeats the purpose of having minimum wage.

Which is good because minimum wage is a ****ing stupid idea in the first place. Its saving grace is that it's low enough to only matter to high school age kids.