Reply to Why does it feel like people have unlimited budgets, even with crazy inflation?

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Reply to "Why does it feel like people have unlimited budgets, even with crazy inflation?"

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]Everyone got huge raises. Who cares if it wasn’t quite equal to inflation because most people’s personal inflation isn’t the headline number. If you own your home outright or have a low-cost mortgage, your rent isn’t increasing. Rent is the biggest part of the CPI increase. Instead, the big raise just falls to the bottom line. [/quote]

Yeah this. I got a 10% raise last year going from 270 -&gt; 300k but most of my expenses are not affected by inflation (mortgage, auto loan, etc). Expenses only went up a few thousand at most last year.[/quote]

Your post shows the inflation has significantly different effects on the haves and have nots. Let's consider two incomes:

100k

250K

10% increase is 10k versus 25k. On the 250k income that 10% increase will cover the everyday inflation in food and transportation costs and utilities. And you still come out a bit ahead. But not for the 10k increase family. Inflation in food costs is enormous and very real and that is what people who are homeowners still faced over the last two years. The higher incomes gain the most with inflation because their salaries go up faster as they have more to start out with. But the middle and lower classes have less, and have smaller increases. Which means the inflation for the core basket of goods hits them harder.[/quote]

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