AssassinsMace
Lieutenant General
Insurance prices are going through the roof these days.
American Economics Thread
- Thread starter Bernard
- Start date
And the CPI indeed shows that food prices have been growing faster than a standard consumer basket.
Regardless - the price of food did not double between 2009 and 2016 so ShadowStats is clearly hot nonsense
Thepremiums doubled in price in 20 years which suggests that inflation is ~3.5%, not the ~10% shadowstats said it was.
what’s more - insurance is really 2 consumer products - there are prepayments for auto accidents that will happen and then the insurance load and carry (the insurer profits/how much you pay for protection). If auto accidents increase in frequency, it’s not “insurance” the risk management that’s becoming more expense, it’s “insurance the prepayment that is becoming more expensive
and what’s more, the cost of cars has gone up and thus so do required insurer protections. Since auto accidents and car prices have gone up, both those would push the insurance price inflation from 3.5% down, often substantially sometimes (the price going up because you buy more of it isn’t inflation).
AssassinsMace
Lieutenant General
Who cares about the past decade. I read my insurance company is charging their customers for cars that were destroyed in all these fires in Northern California. My car wasn't damaged in any fire and yet I'm being blamed because someone else's car was...? My rates have nearly doubled in the last year. You can spin that as much as you want. Overall average Americans are not confident in the US economy like you think because they feel it.
This is how I know you’re full of it; I actually work in insurance and prices of cars have gone up since 2021 because of covid supply chain constraints. Check your 2020 and 2021 sum insureds if you don’t believe me.
Additionally, premiums have maintained its high prices not simply cuz of insurance greed hence the share price of insurers and insurance brokers, but also because of general inflation, cost of materials increasing, el Nina resulting in claims being made due to freak storms etc
Oh but if you think it’s perfectly normal for insurance premiums to go up 33% in a year if not 50%, you should tell that to the mass of angry clients we deal with every day.
If we use that logic then we would have to decrease GDP proportionally to the prior higher tax level GDP. Decrease consumer spending, etc.
And it would take changing not just the TCJA but also bush era tax cuts to somewhat balance the budget. That includes bush sr and. Bush jr.
Your list is basically social security and taxes. Even so, these topics are so politically taboo that it would be impossible enact. So the US is likely continuing to add on more debt faster then the economy can grow.
But at this rate the interest payments are not sustainable. It is ballooning. You're describing a perfect scenario and one where the US can go against entrenched interests and raise taxes and decrease social security. Yeah good luck.
Maybe try to build a good public transit network first.
The definition of a mean would include those who work. And It is not a super minority mind you. the mean would be skewed and pulled up by those who work.
The tax cuts didn’t change spending or investing patterns, the economy is invariant to their existence
For now, yes. But crises force action that can’t happen in normal times; Social Security solvency running in the mid-2
If all government debt is refinanced at 5%, that would cause federal interest expenses to be ~6% of GDP which would be 1% higher than it was in the 1990s and growing at around ~0.2% of GDP each year (7% budget deficits at 5% interest rates with 3% inflation - 7% * 2% is 0.14% of GDP). It’s unsustainable but it can run on until the 2030s when social security solvency can force change, dramatically
The U.S. is fairly unequal so lower values near the 25th percentile simply don’t move the mean, much if at all. And they obviously don’t move the median at all.
Right. But that is counted in the car component of the CPI. The insurance didn’t get more expensive because of inflation, the insurance got more expensive because people are buying more of it.
This isn’t insurance, per se, it’s the amount of housing reconstruction in P&C that’s more expensive. The insurance loads (the unique function of insurance) is the inflation and that is broadly constant
Have you thought that clients who are not angry don’t call about their mildly increased premiums and so your dealing with a selection bias?
It was meant to challenge the validity of the “ShadowStats”. If inflation was as high as “ShadowStats” claims it was - everything should’ve doubled in price in the 2010s. Yet no one can point to a single price that doubled in the 2010s..
Yes. Insurance pools risk. If the pool becomes riskier to insure, everyone pays more for protection. All insurance - life, P&C, and health - have both community rated and experience rated components.
If they weren’t confident, why is their spending on discretionary items so high? Why do they report in surveys that they are confident in their own personal finances?