Rating & Comment: Inflation: The Insidious Tax On All Of Us | Jax Daily Record | Jacksonville Daily Record
Take a close look at the charts to the right of the Federal Reserve Bank.
Unfortunately, they are prima facie evidence of the untold story of Washington politicians killing the wealth of the middle class and savers and setting the stage for yet another national economic calamity.
The weapon is inflation – simply printing more money. Print more dollars to feed the startlingly reckless spending of our Washington politicians – presidents and congressmen of both parties alike.
Consider this: From the beginning of Donald Trump’s presidency to the presidency of Joe Biden, the M2 money supply – the standard measure of money and deposits in circulation – has increased 47% from $ 13.36 trillion to $ 19.67 trillion. Since 2010 the increase has been 132%.
It seems incomprehensible just to think of the stacks of trillions of dollars that were printed to keep up with spending:
• $ 839 billion for the 2009 Obama incentive.
• $ 900 billion for the first COVID relief package in 2020.
• $ 1.9 trillion in the Biden COVID package this month.
• Not to mention the $ 6 trillion in federal deficits over the past five years.
Of course, it is difficult to understand how all these billions and trillions flow down on you and affect your daily life.
But maybe here’s an explicit way to shape the printing of all that money:
You must have noticed that the $ 100 at the grocery checkout is buying less and less.
And that’s it. This is the hidden, insidious inflation tax. It strikes in small quantities, like a constant drop that gradually diminishes everyone’s purchasing power, with consumers seldom realizing the gravity of the tragedy.
This is the vicious work of Washington politicians.
Ludwig von Mises
How the late Austrian economist Ludwig von Mises explained inflation in the 1960s in a series of lectures:
“The first rule, or the only rule we must teach everyone to explain the problems of money, is that increasing the amount of money for the group, for the people, for society, for the king, for the emperors, who does, a temporary improvement in the situation. [Think of this in terms of the COVID stimulus checks — the “temporary improvement.”]
“But if so, why only today and not tomorrow? That is the problem of inflation.
“The problem is not to increase the amount of money. The problem is increasing the amount of things that money can buy. And if you increase the amount of money, instead of increasing the amount of things that money can buy, you are only increasing the prices that can be paid for them. “
This is happening now.
A longtime restaurant owner in Sarasota and Manatee told us last week that food prices for his restaurants have increased 8% to 10% in the past 30 days. Lobster prices have tripled.
A Siesta Key restaurant owner reiterated the rise in food prices and found that they are rising too because their suppliers cannot find enough truck drivers to deliver the groceries.
Such bottlenecks are likely to get worse. Think about what will happen at the national level when the lockdown states are reopened. More restaurants will compete to buy limited food, which will drive prices up even more.
Meanwhile, the National Association of Home Builders reports that lumber prices have increased more than 200% since April 2020, increasing the price of the average new single family home by more than $ 24,000.
A Longboat Key contractor tells us his business is strong, but two problems are weighing on him – the material backlog, which is delaying completion dates, and the inability to find reliable people to work with.
The same applies to the restaurant owner: someone has more than 100 positions that he was unable to fill.
The labor shortage is acute. You know it by yourself. The waiters are slower and you can see the “Hire Now” signs on the doors of every retail store. Employers are desperately looking for reliable help.
The labor shortage is also one of the unintended consequences of Congress printing too much money and handing out COVID relief checks. The incentive to work has decreased.
In March 2020, just before all of the pandemic shutdowns began, Florida’s labor force participation rate hit 60%, its highest level since 2013. It is now 57%. Why work when Washington keeps sending you checks?
Why raise Florida’s weekly unemployment benefit rates too, since the Florida Senate voted unanimously in favor of employers in dire need of help? It is politically popular, but it contradicts economic logic.
It’s hard to imagine how today’s circumstances could end well. Especially when people like AOC, Sanders, Pelosi, Schumer and their puppet Biden demand even more spending and pressure on the Green New Deal. When Congress was about to approve the latest $ 2 trillion plan, AOC said that was not enough. it should be $ 10 trillion.
All of this is a national tragedy and a colossal economic calamity that is inevitable.
Equally tragic is how the Americans don’t seem to know what the looters in Washington DC are doing to them. As von Mises said more than 50 years ago:
“Everything that a government does against the purchasing power of the monetary unit is done against the middle class and the working class of the population under the current conditions. Only these people don’t know. And that’s the tragedy. The tragedy is that all of these people support policies that make all of their savings worthless. “