So everyone is talking about this year’s US inflation, can anyone explain why it’s so important?
In: Economics
Inflation is the general rise in price of an economy over time. Generally speaking the purchasing power of the average consumer goes down. Example, when I was a kid a 20 oz bottle of Soda was $.75 cents now it is $1.50. Inflation usually naturally occurs and if kept at a moderate level it is okay.
The difference we are seeing now is a post pandemic inflation rate. This has a myriad of reasons, some of it being the government giving blanket paychecks to people thus increasing the money supply while the economy wasn’t producing as much so we see a rise in prices. I am not saying that the bailouts were good or bad but the money supply increased while production decreased, so you are seeing inflation at a significantly higher rate than we did in the past.
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