Inflation: the fault of my enemy 


Ava Wittman photographed by Isabella Kneeshaw.

Ava Wittman, Co-Editor-in-Chief

Inflation has been an inescapable topic throughout these past few months. It seems to be the favorite topic of irritated uncles at dinner tables and inflammatory news sites alike. This is, perhaps, all due to the fact that inflation is an inherently elusive topic; it is the result of an infinitely vast web of variables that can be detrimental to the lives of so many. The warning sirens ring especially violently to the current United States population, who have lived through and learned of so many devastating recessions, housing crises, supply chain shortages and economic catastrophes in recent history. 

However, inflation is not an inherently complicated concept. It is simply the idea that over time, across a specific economy, the relationship between goods/services and their respective prices alters to a point where the same amount of money cannot purchase the same amount of goods/services. Essentially, your money is worth less. 

This admittedly sounds detrimental to the consumer (you or me): the idea that one day your money, that used to buy you two cartons of milk, can only buy you one and a half the next year is not promising. However, deflation, which is the economic situation in which goods and services cost less money, effectively making your money worth more, is a trademark sign of an unstable economy. Why this is true is slightly paradoxical but essentially relies on the idea that as consumers see prices are lowering, they are less likely to make major purchases (homes, cars, etc) in the hopes that the prices will continue to lower, thus sort of manufacturing a recession in which goods/services are purchased at a lesser rate, thus leading to a less productive and stimulated economy over all. 

Contrary to deflation, inflation is actually a symptom of a functioning economy – in moderation that is. A little bit of inflation (approximately 2 percent) is integral to the United States economy; as more money is produced (printed at US mints) the overall value of money decreases; however, as more money is created, and thus there is a greater money supply to spend, the economy is further stimulated. That kind of inflation is usually considered beneficial both for employment and economic growth. 

However, the current 8.5 percent inflation rate (10 percent in food and up to 40 percent in fuel) we are experiencing right now, is not this kind of inflation. What kind of inflation it is cannot be exactly pinned down, despite how many news sources try to assign it a specific cause. It is the amalgamation of a near-perfect storm of inflammatory factors. 

For instance, the supply chain shortage that was and continues to make headlines globally is in part responsible; fewer goods with the same demand for those goods makes those goods more expensive, and thus raises the price. The COVID-19 stimulus packages injected money into our economy, meaning that consumers now had more money to spend on goods, thus increasing the demand for those goods, while the supply for those goods decreased, thus making them more expensive. Rising gas prices, caused by a new shortage from the war in Ukraine and our sudden lack of Russian oil, has increased the cost to transport said goods, thus making them more expensive when producers raise their prices to compensate for this new expense. Corporations refuse to lose profit margins or alter how they maintain profit margins, so they charge more as opposed to laying off employees or cutting pay or benefits. 

Essentially, inflation is not the result of any singular factor, despite news sources that would have you believe otherwise. Various media outlets are shouting, Russia’s War in Ukraine Is Driving Global Inflation” or “Republicans blame Biden for inflation” or even “Corporate greed to blame for inflation.” Inflation has become a malicious badge you can freely pin on any group you disagree with, which is not only false, but inherently dangerous to our economy. Economic growth and prosperity is a bipartisan issue. No matter what side of the aisle you stand on, how much money you make and how much money you spend must be of a certain importance to you. So it is absolutely time to stop playing the blame game – to stop finger pointing and to stop trying to buy ourselves deniability. This is a little bit of everyone’s fault, and it is most definitely everyone’s problem. 

How we get out of it is a bit trickier; neither I nor anyone else has a perfectly succinct, attainable and swift solution to return ourselves to safer levels of inflation. Likely, as the pandemic subsides (we hope) and consumer spending habits begin to return to that of pre-pandemic times, inflation may ease slightly. As we begin to rely less on fossil fuels as our main form of energy and we use far more plentiful resources, we may begin to see inflation decrease. However, those very well may be band-aid solutions. It may be time to look at a holistic restructuring of our economy, one that relies less exclusively on the interaction between consumers and producers for its prosperity, and one that secures housing, shelter and food for its peoples, thus ensuring that the impacts of rising costs will be felt less by its people. 

However, if that is too radical, or too sudden a change, especially to make in a country only beginning to regain its grip after unforeseen economic fluctuations, then for now we simply must redirect our attention from determining who caused inflation to who is going to fix it.