Can inflation actually be fixed? Is there any hope? Or will prices just gradually keep increasing?
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Just to explain WHY some inflation is good, since I don’t see it in other posts:
With 0% inflation, your money doesn’t lose value. You can put it under your mattress and it will be fine.
The point of inflation is to make you do *something* with your extra money. If inflation is 2% you can put your money in a HISA for say 1% and the bank will find some use for it. If inflation is 0%, your mattress becomes a reasonable low-risk investment.
High inflation is a problem because prices become unpredictable and long-term business plans become wildly unpredictable. How do you accurately price out something 3 years from now when costs are increasing 5-15%/year?
Low but positive inflation is the balance between pushing people to invest/spend, while still being predictable in the long-run.
Here’s where the middle/working class gets screwed:
Entry-level wages have not kept up with inflation. 10 years at 2% inflation is a 22% increase in cost-of-living. The starting wage for a given job may have gone up ~5-10% in that time. You’re starting at a lower inflation-adjusted wage than your predecessors. Inflation is hiding a massive pay cut.
Wealthy people don’t care about wage growth since their money comes from *not* working.
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