Reply to Inflation: explain it to me like I'm 5

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[quote=Anonymous][quote=Anonymous]It's very simple. People who claim no one knows why are just being disingenuous or blindly partisan.

A staggering amount of money was flooded into the economy in a short time period, both from the multiple COVID relief stimuluses plus the Biden's IIJA. Then we had a long mortgage relief break for affected people and the student loan pause. At the same time there had been a shock to the supply chains due to COVID and offshoring. Then you had a sudden decrease in the number of available labor due to COVID policies, leading to higher labor costs. The cumulative effect was suddenly a huge amount more money was chasing after a reduced supply of goods. When such a thing happens, you get inflation.

Once inflation takes off, it becomes very difficult to tame because people demand more money to keep up with rising costs, which means people have more money to chase after the same basket of goods, and which in turn means employers and suppliers have to raise the cost of doing business.

Inflation never disappears to return to the old price levels. Defeating inflation means prices stop going up. People may herald a few cuts here and there but in reality, prices just level off to a new norm. [/quote]

This would make total sense if there wasn't a global economy. Inflation is everywhere and not as bad in the US as a lot of our competitors. Some countries with austerity budgets have worse inflation than we do.

Here' a look at how the rest of the world is faring

https://www.ft.com/content/088d3368-bb8b-4ff3-9df7-a7680d4d81b2[/quote]

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