Why is inflation a big deal in any Economy?
There are a lot of valid issues that occur when any economy begins to inflate and those issues often are a direct result of how the government managers policy in many different ways.
In America there are a lot of facets of the economy and it is not usually just one or even a few issues it is normally many issues.
However one of the biggest problems faced in this current economy is the high cost of inflation and how the current policies of Washington are severely contributing to these issues.
When decisions are made in a logical fashion based on data and common sense we find by looking at the past we can see what will happen in the future.
When decisions are made not using logic but using emotion and doing so with a political agenda inflation issues get out of control.
Take for instance during the 1970s we saw some of the highest inflation and bank mortgage rates in history.
This created a housing crisis.
What the Past has to teach us about the future…
When Jimmy Carter took office in January 1977, unemployment had reached 7.4 percent. Carter responded with an ambitious spending program and called for the Federal Reserve (the Fed) to expand the money supply. Within two years, inflation had climbed to 13.3 percent.
With inflation getting out of hand, the Federal Reserve Board announced in 1979 that it would fight inflation by restraining the growth of the money supply. Unemployment increased, and interest rates rose to their highest levels in the nation’s history. By November 1982, unemployment hit 10.8 percent, the highest since 1940. One out of every five American workers went some time without a job.Student Text book.
The truth about inflation is almost always about the decisions leaders make that are in power at the time these inflationary events take place.
Take for instance the cancellation of an action that congress took just before this current administration took office.
The keystone Pipeline.
Both democrats and republicans voted for this.
28 democrats voted for this and the people of the United States were for this pipeline because it would mean jobs and lower energy prices.
The decision to overthrow the will of the people and the valid action of congress which was supported by both sides is even now being challenged in court.
Does the President have the authority to remove a congressional action after construction has begun and companies have made purchases to support the completion of the project?
Legally it is likely that this will be a NO!
But we will hear the arguments on both sides.
I suspect that had the permit been cancelled before construction had begun then it would be far more likely that a challenge would be rebuffed however given the very large amount of expenditures made in good faith and the issue of jurisdiction being soundly and constitutionally with congress it is likely that this is one battle that Washington will not win.
Inflation is not about the Pandemic and never will be.
Inflation is and always has been about those in power and the decisions they make.