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The Specter of Inflation Is Upon Us

Inflation

It has been several decades since Americans dealt with the specter of inflation. However, according to several economic benchmarks and commonsense, inflation is oozing into the American economy like poison ivy into an open wound.

The last time the U.S. economy was overrun with inflation occurred during the dark days of the late 1970s. For example, in December 1979, as disco music rocked the nation, the annual inflation rate reached a staggering 13.3 percent.

As Treasury Secretary Janet Yellen recently said during a House of Representatives hearing, “I came of age and studied economics in the 1970s and I remember what that terrible period was like … No one wants to see that happen again.” I doubt Yellen was referring to disco.

While no American surely wants to experience the degradation of inflation, the bad news is it is already occurring, albeit not as bad as it was in the 1970s—at least not yet.

According to the Bureau of Labor Statistics, “The Consumer Price Index for All Urban Consumers increased 5.0 percent from May 2020 to May 2021. Prices for food advanced 2.2 percent, while prices for energy increased 28.5 percent. Prices for all items less food and energy rose 3.8 percent for the year ended May 2021, the largest 12-month increase since the year ended June 1992.”

Although we are not currently suffering under 1970s levels of inflation, we are definitely on a dangerous trajectory.

At this point, many Americans are rightfully wondering if there is anything the federal government can do to arrest the rise of inflation. The answer is obvious: Yes.

The most impactful thing the federal government could do that would stop inflation in its tracks would be to stop printing/borrowing trillions of dollars.

According to the law of supply and demand, when the federal government floods the economy with trillions of new dollars, the value of each and every dollar decreases.

Moreover, when this phenomenon occurs in the aftermath of an unprecedented nationwide economic shutdown, you get the worst-case scenario of more dollars chasing fewer goods and services. This typically produces a vicious inflationary spiral, wherein price, wage, and cost increases build on each other.

Unfortunately, this simple concept seems to not resonate with many of our so-called leaders, who are willing to mortgage our future (and present) in their misguided attempt to “reimagine” the American economy and society.

For instance, Sen. Bernie Sanders (I-Vt.), chairman of the Senate Budget Committee, has proposed a mind-boggling $6 trillion spending bonanza to “address the crisis facing working families, to rebuild our crumbling infrastructure, to deal with climate change, to deal with the needs of children and parents to deal with the affordable housing crisis.”

Keep in mind, Sanders’ $6 trillion budget blowout comes only months after the federal government showered the economy with $4.5 trillion in new spending in response to the COVID-19 pandemic.

The profligate spending on behalf of both political parties is the problem. However, in recent months, the Democratic Party has taken this to a whole new level.

Since taking office a little more than six months ago, the Biden administration has unleashed a plethora of spending plans that make the George W. Bush and Trump administrations appear somewhat fiscally responsible.

To date, President Joe Biden has already signed the $1.9 trillion American Rescue Plan. And his administration is doing all it can to ensure his $1.8 trillion American Families Plan as well as his $2.7 trillion American Jobs Plan pass Congress before the end of summer.

If Biden is successful, and his trifecta becomes law, it is all but assured inflation will rise faster than Richard Branson’s Virgin Galactic spacecraft.

Yet, unlike Branson’s recent foray into outer space, this bumpy ride will last far longer. And the effects will be much more painful, without the adrenaline rush or out-of-this-world view.

In 1919, John Maynard Keynes, not a fiscal conservative by any stretch of the imagination, wrote, “Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some.”

In other words, big government benefits from big inflation. And it is we the people who pay the price—literally.

Reprinted with Permission from - Inside Source by - Chris Talgo

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James
2 months ago

Socialist use hyper inflation to weaken the economy and make people more dependent on the government. If your money can’t buy what you need to survive then you are forced to rely on the government. That’s why you see empty shelves and lines of people waiting for help in the socialist countries around the world.

Becky
2 months ago

The very worst part of this inflationary ATTACK this time around is that it is being done to GIVE AWAY AMERICA’s WEALTH to foreign countries and the invited illegal aliens.
Back in the 70s it was due to the Vietnam War. There was a reason. This has NO reason.
There are two surefire ways to usher in Communism.
1. Bankrrupt the nation.
2. Flood it with foreigners.

Does any of this sound familiar?

Myrna S Wade
2 months ago

Thank you for giving us perspective. I have been noticing higher prices especially for food and fuel.

edgar fletcher
2 months ago

Watching the far left systematically destroy our country is a source of great anguish.

Chris
2 months ago

AMAC, how about a followup article on how your members can prepare for this coming economic hardship.

richard arveaux
2 months ago

Anyone want to bet that it won’t show up in our cost of living increases next year?

D.P.
2 months ago

The simple truth about inflation is the overspending of the government….with money it does not have or is able to back with true wealth. This is almost always the case…..in every inflationary cycle, the beginning is excessive deficit spending. I am no economic wiz-kid, but I have owned and operated businesses, and have been a consumer of goods and services all my working days…..every time our government goes into debt, inflation rises. The trouble today is that we are so far behind in debt there isn’t enough wealth/taxes/etc to cover the spending…..and it will be generational…..and lead to eventual bankruptcy….or an outside takeover of the economy (ref. China). Worse still is the total lack of will on the part of most polititians to be party to change that will save this nation.

D.P.
2 months ago
Reply to  D.P.

For John S. I personally worked hard for the past 55 years…..putting a bit back again and again, pinching the pennies as they say. Built up a good retirement fund…on my own. It cost me along the way in in terms of leisure, luxury and excess. Now, as I seek to enjoy what I have worked to gain, the inflation issue curbs my capacity to live. I am on a fixed income, that may be by some standards higher than some…..and mind you, that social security check is only a supplement for me….I don’t depend on it to live, never planned to have to do that……while I do “suck the teat” it is part of the result of working all my life….but like I said, my primary income as I retire was never going to depend on soc. sec…..or any government program. I take it because I am allowed, and paid into it. What ever else someone does is the result of their own effort, and the reward is theirs as well. Some folks didn’t do what I have done, and depend on that “fixed income” from the government….and that dependence is of their own making. But we need not harm them after the fact……inflation hurts every one who needs to eat, drive, keep a roof, help a neighbor…..and inflation is the unnatural result of a government gone mad with spending.

Becky
2 months ago
Reply to  D.P.

And some of us thought the way you did. Worked very hard as long as we could. Saved.
And had it all stolen by Wall Street banks out of our 401ks. With no repercussions. Yes. DC passed the regulation to ‘protect consumers’, but they did not make it retroactive. Many of us were left with ONLY social security.
Banks and government control our very lives.

Wayne Peterkin
2 months ago

As most AMAC members know already, inflation is the biggest enemy of all those on fixed incomes. That includes me. Therefore supporting those politicians, generally meaning liberal Democrats, who have no basic understanding of the simplest economics (or don’t care) means you are aiding and abetting the enemy. As just one example, raising the minimum wage is inflationary. Prices must increase to cover that cost for businesses. Liberals do that to buy votes using other people’s money. Vote conservative if you want to minimize inflation, understanding that correcting an inflationary spiral cannot happen overnight.

John S.
2 months ago
Reply to  Wayne Peterkin

Forget those on fixed incomes — they’re sucking at the government teat anyway — inflation is bad for billionaires who have a lot of money to sit on compared to how much they spend. Good hardworking folks like Bezos and Musk need to know that their piggy banks will be bigger next month than they were this month — that only happens with deflation, not inflation!

Dr.C
2 months ago
Reply to  John S.

No, it’s the illegal aliens and the politicians who are sucking the life out of this country, those on”fixed incomes”are retired people who paid into the system for 50 years plus. In my state, which is a Democrat haven, the seniors are still working part-time to keep up.

Brenda Blunt
2 months ago

Need to get all the avenues of transporting goods back into the flow of everything to alleviate the demand.

Bob L.
2 months ago

Yellen may remember how bad the inflation of the 70’s was, but she studied and is a product of the wrong economics courses, aka Keynes economics. We have been (mis)guided by that economic model for generations instead of the far better economic principles of Ludwig von Mises as taught at the Mises Institute.

Paul W
2 months ago

To quote the title of a Carpenters song, “We’ve only just begun.” This regime has set up the “perfect storm” for YUGE, catastrophic inflation that will devastate this country. People on a fixed income will get hammered especially hard, but don’t worry…this regime will continue to take of the illegals and the rest of the slackers that have never paid a dime in taxes. That isn’t hyperbolic, but unlike dimwitted joe’s use of the phrase, it REALLY ISN’T hyperbole.

Chuck
2 months ago

Government= grabbing (taxes) and spending. Well, with Joey at the helm of Ship of State, we are dangerously listing to the point of sinking, economically, freedoms and liberty and all factors of production and its rewards.

DJames
2 months ago

Patriots, We saw this coming. The absolute mindless sheeple that voted for Commie Joe and his Hoe VP are responsible for this. We the People pay the price. The Democrats and their CCP masters are determined to destroy our economy. Pray for a universal American revolt before it is too late.
My daily fervent prayer to Almighty God is that He will smite the Democrats the RINOS and the SCOTUS.
May they burn in everlasting hell for all eternity !
Praise God !!

Esther
2 months ago
Reply to  DJames

God has abandoned us and left us with the godless in charge! I’ve had it with the Almighty; he can go scr*w Himself, my Sunday’s are free now!

Mickie Enders
2 months ago
Reply to  Esther

We have turned our faces away from Him and now He has turned His face from us!

Judy
2 months ago
Reply to  Esther

Esther, I am also very upset about how things are going, but I always remember many scriptures for encouragement. This is one to remember when we are most discouraged and want to blame God; when our Savior was on that cross of shame, and He ‘became sin’,(for our sin was put upon Him), for all of humanity, Jesus Himself felt abandoned by His Father at His most vulnerable and painful moment of His life, when He cried,

‘My God, My God, why hast thou forsaken Me?’

And as we know, God hates the sin, but loves the sinner, as He turned His face away from His only Son at that critical moment. But God did not abandon Him, and Christ asked His Father to forgive His accusers and murderers. Then He died and rose from the dead to set us all free! So, Esther, don’t allow the anger to make such a life determining decision. Also, remember Satan loves it when we’re angry at God. I hope and pray you’ll accept God’s eternal love and grace for you….and hang in there, He has a better plan for His believers in the end.

Chris
2 months ago
Reply to  Judy

Amen, Thank You Judy

Tavit
2 months ago
Reply to  Judy
  • God bless you,Judy! That is a very powerful sermon for all of us, and I thank you for it!
Chuck
2 months ago
Reply to  Esther

He remembers our frame, that we are dust. From dust we were formed to dust we shall return. We aren’t very substantial, but HE is. So vent, but it’s what’s in your heart that counts for eternity.

Stephen Russell
2 months ago

Seeds for Depression 2?

JohnH
2 months ago

FEDERAL DEBT: News today that first nine months of year 2021 is 2.24Trillion deficit & that year 2020 was total 3.1Trillion. What has happened to fiscal responsibility & why are Trump tax cuts still in place. I would really like to know how many Companies bought stock back with the tax cuts instead of reinvesting. The Judicial Branch must step up & stop the Executive Branch spending of money we do not have or —–what will be outcome to Americans.

Wayne Peterkin
2 months ago
Reply to  JohnH

Economics 101: Every single dollar taken from any business in taxes is a dollar less that business has to expand, grow jobs, and pay wages.Every single dollar taken from individuals in taxes is a dollar less a family has to buy what they need and want which fuels the entire economy. We have a government spending problem that caused those deficits, not a revenue problem exacerbated by the virus shutdowns.

Felix
2 months ago

COLA (Cost of Living Adjustment) for retirees on Social Security? Or will the Biden administration adjust the amount of taxpayer money needed to house, feed, educate, transport and provide for the health needs of all the illegals invited to cross the southern boarder?

Art
2 months ago

YOU WANT THE GOVERNMENT DO WHAT ??????INFLATION IS A HIDDEN TAX! !!! YOU WANT UNCLE SAM TO TAKE CARE OF THIS?????? JOEY AND THE MARXIST LEFT ARE OFF OF THE LEASH. SOMEBODY OUT THERE MAY HAVE VOTED FOR THIS CRAP. HOW ARE YOU LIKING JOEY AND HIS FRIENDS NOW????? BEND OVER.

David B.
2 months ago

The Marxists “running” this Country want us all (them excluded) to be equally poor. Only then, will they have complete control. You think your money/wealth is safe from the Gov’t confiscation/re-distribution? Once they rid us of using paper money(cash), and relying on a cashless society for all transactions, they WILL track your spending habits, and can restrict your ability to spend as desired. It is coming sooner then you think.

J. Farley
2 months ago

Surprises, surprises, NOT, We know from the moment that Hidden Biden was declared the winner last November, that inflation was coming, I am only surprised it took so long, the polices of the left will always bring inflation and stagnation. How many times does it have to be said Communism does not work. Here we go again, Obama / Biden damn near broke my wife and I last time, this may finish us off
ROT in hell Biden !!!!!!!

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