Most of those trillions were delivered to the ruling/corporate class who has used it to secure assets instead of create value. That is the source of this inflation.

For example: https://www.msn.com/en-us/news/us/koch-e2-80-99s-foundation-...

If so, the solution to the problem presented in the article is simple: tax the rich.

Or even just stop giving the rich money that is taken from regular people. The money may not be directly taken from us, but printing money causes inflation, which is not really different from taking money in the form of taxes. At the end of the day all of us regular people still have less purchasing power.

Well printing it and putting it into circulation causes inflation. If you give Bill Gates $1Tn and he hides it under his mattress, that does not cause inflation.

If Bill takes it and buys more farmland, that does cause trickle down inflation (depending on lease rates charges for farming).

yes, but that's putting it into circulation, isn't it?

The problem is more fundamental. The financial system is based on the immoral and parasitic practice of usury. The fiat money we use today is controlled by the whim of the government, which borrows money from the Fed with usury. It has to print money to pay it back because due to usury, it keeps increasing.

tax the rich? by whom? the same people have gave the rich the money? a bit incestuous, no? This is my point. stop giving these people the power to take from one group and give to another. It only works out for those connected. And guess what? in the history of the world, the poor have never been connected. Lower taxes (lower spending) and the poor get to keep their money and do as they wish with it.

Even more simple: “fix” the problem by not creating it in the first place.

How does buying up assets lead to price increases in "groceries (96%), gas (93%), dining out (57%), and clothing (42%)"? Are the Koch Brothers hitting up Costco every day?

Obviously it doesn't. In fact, one common long-running justification for why we should helicopter-drop money to ordinary people rather than businesses and banks is precisely that ordinary people will spend it on goods and services whereas the wealthy will not - and it seems like we're seeing the consequences of actually doing this right now.

The trouble is that there's a strong strain of left-wing populism in the US based around a view of the economy that is simple, gives someone convenient to blame (the evil wealthy corporate class sitting on all the wealth like dragons on hoards), and bears almost no resemblance to the way the world really works. Which is why you still get people pushing for wealth redistribution as a solution to this inflation, even though the very argument that was being used to call for it before means that it will make the inflation problem worse.

Gas is up because of the recent pipeline shutdown.

Grocery prices have been rising since the start of the pandemic. Far more people are now accustomed to cooking at home. Anecdotally, I am one of them. I buy at least twice as many groceries as I did pre-pandemic and that is not going to change. Also the pandemic is still in full force internationally, especially in places where the US sources major food imports.

Clothing is up because commerce with the Chinese textile industry was shut down during the pandemic. It will take at least another year before clothing prices are restored.

Notice that the massive spikes in real estate prices are not even mentioned in the article. This is a propaganda piece. It cherrypicks items that poor people depend on in order to promote backlash against redistribution.

So the trillions being delivered to the rich is the source of inflation (per your comment above) because of... other nefarious things the rich people did, and also other events that they didn't do? Did they need those trillions to be incompetent, maybe? Or to reduce support for redistribution (per your comment pre-edit)?

It doesn't drive inflation, it merely drives inequality and in specific circumstances it can cause needless unemployment or bullshit jobs.

The article reports that 72% of respondents said their income has not increased. So whatever trillions of dollars were created don't seem to have made it to the populace.

Either the respondents are not a representative sample of consumers, in which case the article's conclusions are of little value; or something other than increased consumer spending, like supply chain issues, is causing the inflation.

It's surprisingly plausible that wages would not rise and inflation would speed up.

This can occur because companies lay off employees due to rising costs and lack of demand (while raising their own prices) or because the money is going to some alternate consumption.

Food prices could increase today simply because one or more of the beneficiaries of those trillions of dollars has allocated it to land acquisition. Retiring of productive capacity for other "economic" purposes will increase inflation.

Take Germany as an example of stagflation. Last year we had to fell a lot of trees because bark beetles. Everyone was dumping their bad lumber. A CDU politician introduced a 85% quota so that the markets can recover but now the situation has reversed and some forest owners are not allowed to harvest their lumber despite high prices. For small businesses losing those last 15% may make it unprofitable to harvest at all. Making it illegal to run businesses serving hot markets is a recipe for cost increases without corresponding wage increases.

However, in the US the investment rate is going up and businesses are expanding production. The biggest factor right now is the semiconductor shortage and there it is just a matter of time before things return to normal.

Anecdotally, I've become skeptical of US business investment and production metrics. Companies can ramp up investment into assets or expand production of assets without producing consumer/b2b goods.

We capture increased production and investment in speculative assets as economic growth when it may not yield any new production.

> It's surprisingly plausible that wages would not rise and inflation would speed up.

I agree entirely. But the linked article explicitly blames increased deficit government spending. The article reads like a stealth attack on stimulus, with the implicit point that inflation should be controlled by ending it, rather than looking more deeply at causes like the ones you suggest -- which might lead to solutions that a Forbes contributor might not like, like taxing the rich.

Your second sentence does not follow from your first. Trillions of dollars in stimulus have allowed millions of Americans to retain the bulk of their income while not working to produce anything.

If the stimulus money only allowed people to maintain their income level rather than increase it, then the inflation pressure can't be coming from increased consumer spending.

GDP only dropped 2.3% last year [0], so there's approximately the same amount of stuff to buy.

The linked article reads to me like an incoherent attempt to scare people into thinking the stimulus was a bad idea.

[0] https://www.bea.gov/news/2021/gross-domestic-product-4th-qua...

> something other than increased consumer spending, like supply chain issues, is causing the inflation

My (naive) understanding is these are tightly linked. The process is something like:

   => Consumers have more cash to spend on goods.
   => Consumers buy more goods
   => More demand is created for commodities to build those goods
   => Demand for commodities exceeds demand
   => Commodity prices inflate
   => Manufactured good prices inflate

Yes but the article explicitly states that the vast majority of consumers don't have more cash to spend. So the cause of the inflation must be something else.

Yes, it is caused by something else: the 28% of consumers who do have more cash to spend.

Them having the cash doesn't necessarily mean they spent it; plus, they could have spent it on deleveraging their debts (and not on consumption).

I tend to agree that all the inflation we are seeing right now is supply chain related (with the one exception of graphics cards - the liquidity injected into the system probably made price of crypto go up which accelerated the demand for GPUs, so the GPU issue is both a supply problem & demand problem)

That's not enough to move the needle. I think we are seeing "inflation" due to short term supply chain stop and restart.

As incomes are still fixed and there are cheaper substitutes for almost everything you want to eat people will modify and reduce.

Then the solution is simple: tax the rich.

actually median savings are at all time highs for the average person. thanks to stimulus payments and enhanced unemployment and also shutdowns preventing people from spending money even if they wanted.

The idea that more cash has driven up the price of basic goods this quickly is almost certainly frivolous. The pressure simply isn't there, especially with wages still so low.

That's not to say prices haven't been suppressed over the years in various ways that combat normal inflation (6oz denim Jeans that are now 10% Spandex I'm looking at you) and there's a ton of money in the system that have mostly went into assets.

Prices aren't up because people are bidding more for finished goods. Prices are up because commodity costs are up, so the inputs to production cost more. Those costs are passed onto end consumers, to the extent they can afford them, or they are passed on in the reduction in the availability of goods.

It's not just more cash (increase "demand"), it's also reduced supplies due to many businesses shuttering or reducing output during covid.

GDP only dropped 2.3% last year [0], so there's approximately the same amount of stuff to buy.

[0] https://www.bea.gov/news/2021/gross-domestic-product-4th-qua...

My rationale is simply that more dollars to go around means that one dollar is worth less. Simple logic, rather than fancy economics, I guess.

> My rationale is simply that more dollars to go around means that one dollar is worth less. Simple logic, rather than fancy economics, I guess.

You're looking at the total supply (which is true in the long term, since those dollars have to be spent eventually). However, inflation in the short term has much more to do with velocity and actual spending - if all of that money just sits in bank accounts, there will be no inflation.

So looking at the money supply in isolation will tell you nothing about the actual inflation. It's about what's happening to that money.

You explicitly blamed distribution of trillions to the populace, which I think is the conclusion the article's author wanted people to come to.

Your response illustrates the likelihood that the article is a stealth attack on government stimulus to the non-rich, to deflect the possibility of more straightforward solutions, like curtailing stimulus to the rich.

This was due to the pandemic disrupting the global supply chain, not because of the inadequate yet desperately needed stimulus, unemployment supplement and child UBI.

Trillions were not distributed to the populace, trillions were distributed to businesses and the Fed to leverage even further to prop up the stock market. The “populace” got billions.

The printing isn’t really the problem either, it’s a symptom of policies from both parties for 50-60 years resulting in a nation that functions purely on debt from individual households, small businesses, publicly traded businesses, to the government itself.

Before the pandemic the majority of households couldn’t cover a $400 emergency. But the truth is businesses and governments were in the same position, and even in “the greatest economy the world has ever seen” the majority of them live the equivalent of paycheck to paycheck just servicing their debts.

A lot of large businesses had large cash reserves. It's the small ones that needed the support.