
“Inflation is when you pay fifteen dollars for the ten-dollar haircut you used to get for five dollars when you had hair!”
-Sam Ewing
Introduction
CNBC defined “hyperinflation” as a “condition of rapidly rising prices that can ruin currencies and bring down whole economies.”
During most of 2021, Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen reassured the American people that the rise above 2 percent of inflation was “transitory.”
Inflation Exploding While Growth Is Slowing
Under the Biden administration, the role of government in the economy has undergone its biggest shift in 90 years. Rather than fear of inflation and debt, the policy makers are concentrating on broad social goals.
The Federal Reserve recently projected 2.8 percent GDP growth, a sharp dive from their prediction made just last December of 4 percent.
Inflation Outpacing Wage Increases
Wages are not even vaguely keeping pace with rising prices in gas, food and rent.
Americans Biggest Concern
Americans are far more concerned about the economy than COVID.
Conclusion
Low, stable inflation and historically low interest rates have powered the economy for the last three decades. If this starts to unravel, policymakers will face the most challenging years since the 1980’s.
The midterm elections are coming up in November, at which time the U.S. economy could be in the throes of a massive recession.
Democrats could suffer a historic defeat if voters take out their pain on the party in power.
Photo by Simon Cunningham