When we were kids, we knew the word inflation from bicycle tires that went flat after we jumped a curb. We couldn’t wheel around the neighborhood on flat bike tires, but the fix was easy. We borrowed a hand pump, pumped air back into our tires—inflated them— and took off on our adventures.
We also knew about inflation from blowing up balloons with the goal of popping them with a pin and making some other unsuspecting kid jump sky high. It was great fun!
As adults, inflation has become a much more sinister experience that is scaring us all and affecting what we can and can’t do.
Economic inflation results from a general increase in the money supply, which leads to an increase in demand for goods, which leads to an increase in prices that causes a decrease in the purchasing power of a dollar. Clear as mud?
The actual inflation rate was 8 percent in 2022 and supposedly almost 4 percent this year. I don’t have a degree in economics, so I don’t know if you add 8 and 4 to get a 12 percent true inflation rate now, but I do know that every price tag I look at is much higher than it was a year ago.
What caused such price increases?
Experts tell us that current inflation stems largely from the Covid pandemic that made goods scarce and therefore more valuable, thus more expensive. That’s because fear of the virus shut down factories and supply lines.
Then in early summer 2020 President Biden shoved through a $1.9 trillion stimulus package. The money hit the streets, and people strapped on their masks and got out to spend those bonus bucks.
But because manufacturing and transportation weren’t up and running fully, goods were still scarce. Manufacturers and retailers were having to pay people more to come in to make and sell stuff so the increase was passed to the buyers.
Now, things are back to normal, but workers are still demanding the higher pay, so those salaries are still adding to the cost of goods and services.
And as with wages, once a price goes up on an article, it usually doesn’t come down so we’re stuck with higher prices in perpetuity.
If you eat out much, and I do, you’ve watched that deluxe fastfood hamburger jump from $3.99 to about $7.59. Add large fries and a drink, and you’re looking at $15 for a meal we’re told is not good for us anyway.
I heard the other day that because fastfood franchises in California are having to pay their employees $20 an hour just to get them to come in to work, a Big Mac will soon cost $18. Take your family of five out for Big Macs with drinks and fries, and you’ll burn up a $100 bill!
Not many of us can do that very often with all the other things a family of five has to have! So I’m seeing a dimming future for the fastfood industry.
But you get little relief by buying groceries and cooking at home. Food prices are soaring. We are spending $100 this year for groceries we bought for $60 a year ago. It’s hard to get out of the grocery store for less than $100 now, even though you went in for “just a few things,” not a week’s worth of real food.
My friend and I went to Mistletoe Marketplace in Jackson last week and enjoyed the festive atmosphere and the variety of things we could buy for gifts or for ourselves.
What I didn’t enjoy was the prices. In one booth that we usually visit, a sign warned us that all the pants and skirts were priced at $99, the blouses were $79, and all the teeshirts were $69. I almost bought a jacket for $119 before I came to my senses and realized that I might wear it two or three times and its price had been inflated exactly that many times. I left it on the rack, as I did most of what I looked at. So that’s bad for merchants.
I have two notes to myself to deduct more for my supplementary health insurance this month and my prescription insurance next month. I’m not getting more benefits or covering more prescriptions, I’m just paying more.
All this would be fine if all our salaries were going up at the rate the fastfood workers and others get. But they’re not. My salary has not changed. If you depend on Social Security, you’ve gotten small raises, but they’re eaten up by inflation. You still aren’t earning much on your CD, and your stock market investments are in the tank.
I’m trying to look on the bright side. Avoiding fast food might improve my health and my weight. This year, I can clear out my closet and it will stay clear because I can’t afford to fill it back up. I’ll save time not shopping and use that time to clean my house and practice my cooking. Well, no, I’m not that desperate.
But I do wish the solution were as simple as it was when we were kids and had a handy tire pump that made everything right again. Instead, I fear we’re all going to jump sky high when this inflation balloon pops.
