So everyone is talking about this year’s US inflation, can anyone explain why it’s so important?
In: Economics
Inflation, broadly, is what happens when money becomes less valuable as a result of more money being injected into a given economic system. In this case, spending went down during the pandemic, and a lot of stimulus money wasn’t actually used. Now that the country is reopening, a lot of people are starting to spend that saved-up cash.
The current inflation is both a good and a bad sign; it’s bad because it obviously means prices will go up on essentially everything, but it’s a good sign because it indicates that a lot of people are starting to spend money again at pre-pandemic rates, indicating that the US is returning to economic normality. At the same time (on a personal level); inflation is actually a *good* thing for debtors, as debts don’t inflate with the currency, thus the functional value of the money you owe goes down with inflation.
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