Inflation

Inflation is a problem and it’s only going to get worse. How do I know inflation is a real problem? One of the ways that the government measures inflation is with “COLA” index. This measures the cost of living in different states and zip codes by measuring the cost of certain goods. 100 is the average score given; a score below 100 means there is no inflation and if it is above 100 there is inflation. Another way to find out if there is inflation would be with the “Stamp Index”. How often are they raising the price of stamps? All you have to do is ask yourself is the cost of stamps rising too, too, quickly. If the price has gone up it is due to inflation. One of the easiest ways to check if there is inflation, is to check how much it cost to fill up your gas tank with fuel, versus last week or last month or last year.

There are many reasons for inflation to be considered a bad thing for everyone. Inflation is an unapproved tax on the poorest people in the country. Mortgage rates are starting to rise, which means that fewer people can get a mortgage and buy a house. This also means that it lowers new houses from being constructed because fewer people can afford to buy a house so there is no point in building a speculative home. But the biggest issue of inflation is that our money is being devalued. That means that the price of goods goes up so you can’t buy what you need to the same amount of money you paid for it last week, month, year, etc.

Inflation is very problematic and it’s also just as hard to fix on a long-term basis. Some possible solutions are: One of the biggest hammers that the Federal Reserve has is to raise Prime interest rates. This would decrease the supply of money. A second way would be to increase the supply of oil, gas, and other energy sources., this would drastically reduce the inflation rate.  The hardest way to fix inflation for our government would be to reduce the budget deficit and no Administration or anyone wants to do that. 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s