This thought came to me as I was food shopping. So I know there are things that increase the price of certain items (beer, cigarettes, sugar tax – UK) but they also increase with inflation each year like other foods such as bread.
Apparently, the average inflation raise over the last 10 years in the US is 2.37% as of July 2023. So if it is the same in another 10-years, over the space of 20 years inflation would be 4.74%, if we say inflation is the same? And so on and so on. If it continues wouldn’t prices, for say, bread just end up getting higher and higher and be like $10-15+? And as wages don’t rise with inflation the same way foods do fewer and fewer people each decade could afford it?
Now this is just random thoughts I had when shopping and I am not making any comments on any politics. All I wanted to know is, is my thinking true that prices will just go up and up indefinitely decade-on-decade, why or why not? And I am an idiot so imagine I am 5.
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Edit: Went to sleep and woke up to about 300 notifications, thanks for your explanation to a Neanderthal like myself.
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In: 4366
In the past wages were largely pegged to inflation so you would get increases that kept pace with inflation. Changes in tax code that started in the 80s have stagnated wages for the most part and eventually something is going to have to give to correct it because you are right, it is entirely unsustainable. Historically when things got out of whack the society largely collapsed as was seen in most ancient empires and more recently in many revolutions. Social inequity is the killer of societies so the only question is will the current ruling groups get their shit together and avert the next collapse or not.
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