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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Road Walker who wrote (371733)	2/23/2008 4:39:58 PM
From: tejek	Read Replies (1) \| Respond to of 1578448

Well, I am glad to see that some economist is finally putting that one to bed even if it is Obama hating Krugman. <g> Not sure I agree with him. As gas prices rise it's a tax not only on the consumer but on every piece of merchandise that has to be transported... which is everything. A double hit, higher prices and less discretionary income But you have to put it in the proper context. At $100 oil is back to where it was in 1980. However, oil in 2008 makes up a much smaller portion of the GDP than it did in 1980 so its impact on today's economy is much smaller as Krugman aptly points out. Secondly, the stagflation argument neglects the incredibly deflationary aspect to the decrease in housing prices. And housing and its pricing are far more important to the American economy than oil. So as I see it, the problem is not inflation or even stagflation but deflation.