Inflation in the United States has run rampant.
With no end in sight, many are wondering when this madness will stop. The holiday season is upon us, and many families are concerned about providing for their kids and wondering if they will be able to get many holiday staples such as turkey or even Christmas presents. The impact of inflation has been felt by all Americans rich and poor. According to the Washington Post, “U.S. inflation is running at a 13-year high of 5.4 percent…” Even everyday items such as groceries and gasoline are at record highs.
According to the Labor Department, restaurant prices have increased close to five percent. The increase in prices can be attributed to labor and supply chain issues. This story is not unique to the restaurant industry. Gas prices have gone up nearly 50 percent and nearly all industries are facing these challenges. Without a great amount of support from the government, many companies have had to take matters into their own hands, by increasing wages and offering increased incentives. Even with such benefits, companies are still struggling to find employees.
The causes for the immense inflation we are facing can be traced to the decisions and some extent the lack of decisions made by the government. As Americans, we need to put more pressure on politicians to improve the economic outlook of our country.
The inflation we are experiencing is partially due to the extensive stimulus offered by the government as well as excessive spending by the government. In an interview with the Associated Press, Jason Furman, one of President Obama’s top economic advisors said,” A flood of government spending — including President Joe Biden’s $1.9 trillion coronavirus relief package, with its $1,400 checks to most households in March — overstimulated the economy…”
The stimulus offered by the government was necessary for so many Americans, but its benefits now seem futile compared to the outrageous cost that many of us are experiencing. The same $1400 that the Biden administration handed out in March is not worth nearly as much as it was at the time it was handed out. In addition to the stimulus, the Biden administration continues to push massive spending bills that are just increasing the amount of cash in the economy.
Increasing the amount of cash sounds all good, till it becomes the root cause of inflation in the country. The more cash that continues to be available, the more inflation we will experience.
Many are calling on corporate America to increase the minimum wage and offer more benefits, but even these attempts are not enough to counter this inflation. According to the same article by AP, even though wages rose sharply in October of this year, after accounting for inflation wages fell by one percent.
The “increase” in pay that we are seeing is not truly an increase in this economy. The costs of living for American families are rising too fast for wages to keep up. If stimulus has shown as anything it is that throwing money at a problem will not solve it.
Inflation will continue to be a problem until the government decides to take on supply chain issues head-on. Up until recently, the government decided not to utilize the petroleum reserve that was stored up.
As gas prices increased and kept increasing, this petroleum supply was just stored up. It was only in the past month that President Biden announced the release of 50 billion gallons from the petroleum reserve.
It is nice to see that the administration is finally moving in the right direction in terms of supply chain issues, but this also leaves questions as to why this was not done earlier instead of later. The petroleum supply chain is just one example. Similar action needs to be taken to improve the supply of other crucial goods like food and energy.
Although some will argue that the economy will eventually re-balance itself, this process can take years if not decades. The economic changes that have occurred in the country have also not occurred at such a speed. In an interview with Bloomberg, Robin Brooks, the chief economist of the IIF, said, “The U.S. is emerging from this crisis much faster than others…” It’s potentially globally destabilizing because nobody else was able to match that.” (Forbes).
We are in uncharted territory. The “normal” ways of economic recovery have been misconstrued. There is no normal process for the economy to recover because of the hole that we are now in.
Consumers are tired of paying such high prices and also having to make tough choices such as whether to fill their car with gas or put dinner on the table. No family should have to make such decisions.
Companies can only do so much to watch their backs and provide for themselves, but unless there is a unified effort by the government to be proactive and create a stable economic recovery, we will continue to experience high inflation and supply chain issues.
There has been some progress improving the supply chain, but a lot more work still needs to be done.
As citizens of the country, there is only so much that we can do by ourselves. we need to put more pressure on politicians to enact swift measures that will lower the prices of consumer goods and also improve the flow of goods in, out, and around the country.