Inflation Has Taken Hold
When government grows without restraint, the American people pay the price.
If you’re like most Americans, it’s getting harder to balance your family’s budget. Even with multiple stimulus checks coming in from Uncle Sam, there’s still not enough money to cover household expenses.
While you might be worried about it, some economists and politicians actually think your lack of purchasing power is a good thing.
Case in point: A headline for an opinion piece in The New York Times reads, “Inflation Could Stay High Next Year, and That’s OK.”
In the column, economist Peter Coy argues all the reasons why inflation is harmless and temporary, but he views inflation purely through a lens that only a policy wonk can appreciate. Coy may think inflation isn’t a problem, but in the real world where people work for a living in order to buy milk, eggs, and a used car, it’s harder than ever to make ends meet.
CNBC reports that consumers now face higher prices in a range of products and services including airline tickets, used cars, gasoline, hotels, groceries, clothing, furniture, and others.
Consequently, “Americans are feeling that heat,” Business Insider admits. “Nearly nine in 10 adults in the US have experienced price hikes this year, and two-thirds said those hikes have hurt their finances, according to a survey conducted by Bankrate.com.”
A look at the numbers tells the story. And the numbers don’t lie even when politicians and economists try to sugarcoat the data.
Analyst Taylor Tepper writes: “Overall, prices in July climbed 5.4% year-over-year, according to the Bureau of Labor Statistics (BLS), and 0.9% over the past month. The indexes for homes, food, energy and new automobiles were key drivers of inflation growth last month. Of course, those items are key to the basic financial life of normal Americans, thereby stretching their bottom line.”
Meanwhile, the government keeps spending money like there’s no tomorrow, and there may not be a tomorrow for our children and grandchildren thanks to reckless politicians who can’t see beyond the next election. Congress is currently working on $4.5 trillion in spending legislation.
But the bill is full of pork-barrel spending, sending millions of dollars back home to congressional districts.
Former U.S. Treasury adviser Stephen Miran writes, “While the U.S. desperately needs improvements in roads, bridges and tunnels, the timing couldn’t be worse for inflation.” He adds: “There are other hidden inflationary forces in the bill. A persistent driver of inflation is the regulatory cost of doing business, and the bipartisan infrastructure bill is filled with new regulations.”
Ultimately, when the government spends borrowed money and increases regulatory burdens on businesses large and small, it’s the American people who pay the price.
That’s making some parts of the country look more like the Soviet Union under communism than the land of the free, as shoppers face empty grocery store shelves for the first time in memory.
The Texas Public Policy Foundation blames the growing acceptance of inflation by economists and politicians on what is known as Modern Monetary Theory. MMT is basically a smoke-and-mirror trick to take the negative feeling away from the word inflation and convince Americans that higher inflation is actually good for them and the country. Essentially, the Federal Reserve prints money while holding down interest rates and manipulating numbers to make inflation look harmless.
“Inflation also acts as a tax on us as it reduces our purchasing power,” according to the foundation. “Put simply, government uses inflation to confiscate a portion of your savings and your wealth.” That’s an argument economist Thomas Sowell has been making for decades.
We can add inflation to the list of problems this administration promises to address but does nothing to solve. Well-to-do economists writing op-eds for news and financial publications will never have to choose between paying the electric bill or making a car payment, but the rest of us know inflation has a real impact on our ability to get the most out of our hard-earned money.
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