Proponents of the federal government's runaway spending and money printing argue that US data showing rising inflation are “passing” outliers or otherwise unrepresentative of a serious problem looming. But new data The figures published by the Organization for Economic Cooperation and Development (OECD) show that inflation in industrialized countries has reached a high level that has not been reached since 2008.
The OECD only uncovered that prices in the industrialized countries it monitors rose by 3.3 percent from April 2020 to April 2021. Energy prices rose a shocking 16.3 percent, while food prices were less volatile, rising a more modest 1.6 percent.
This graphic from CNN business helps put the data into perspective:
Image source: CNN Business
It is increasingly impossible to deny that prices are rising both in the US and around the world. Why is that important?
Well, inflation works like a stealth tax on ordinary people. Their purchasing power is eroded and their quality of life deteriorates as a result. Inflation manifests itself in a myriad of small but damaging forms.
For example a top manager at Costco recently warned that his retail chain will have to raise prices on essential essentials like bottled water and chicken due to the skyrocketing costs in their supply chain. Other consumers are hit by "shrinkage" With stores shrinking the size of packages at a certain price, it's a sneaky approach for retailers to be wary of the setbacks that come with increasing sticker prices.
Either way we all lose.
And all of this can ultimately be traced back to political decisions. Inflation is no accident. This is what happens when the government prints money to pay for expenses instead of collecting taxes directly.
"Almost a quarter of the money in circulation has been created since January 2020", most recently FEE economist Peter Jacobsen pointed out. But printing more money doesn't mean we actually have more stuff, and "as more dollars chase the exact same goods, prices will go up."
There are no free lunches and no government expenses. This is how business works, whether here in the USA or in nations around the globe.
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