Re:83% of Americans Are Belt Tightening Due to Inflation Pre...
by CarelessExpert on Wednesday May 26, 2021 @05:00PM
(#27296043)
Just a quick correction due to a copy-and-paste error, the article quote is: "86% indicated they experience price increases on everyday goods and services."
That said, I agree, inflation isn't a problem, the rate of inflation is.
I also think folks, right now, are confusing price increases due to supply or demand shocks with inflation.
Housing, cars, computer chips, and many other products are experiencing a mix of a supply shock and a demand shock as last year's decisions to reduce production have bitten us as demand is coming roaring back and production can't be instantaneously re-adjusted for that demand.
That is causing a spike in prices that's rippling through the economy in various ways, from increases in prices of lumber to a spike in used car demand.
This is a fleeting effect that'll go on until supply chains catch up.
The problem is the outcome looks the same: price increases. But the policy response has to be very very different.
That said, I agree, inflation isn't a problem, the rate of inflation is.
I also think folks, right now, are confusing price increases due to supply or demand shocks with inflation.
Housing, cars, computer chips, and many other products are experiencing a mix of a supply shock and a demand shock as last year's decisions to reduce production have bitten us as demand is coming roaring back and production can't be instantaneously re-adjusted for that demand.
That is causing a spike in prices that's rippling through the economy in various ways, from increases in prices of lumber to a spike in used car demand.
This is a fleeting effect that'll go on until supply chains catch up.
The problem is the outcome looks the same: price increases. But the policy response has to be very very different.