Sidney Brockmann
Inflation is a factor of increased gas prices many have noticed and are discussing.
It is no secret that inflation has been on the rise the last couple of months, causing worry in the minds of many Americans as they watch the prices of everyday essentials increase.
Recently, Americans have noticed this the most when pumping their gas; although inflation is not the only factor that leads to increased gas prices.
The average rate of inflation in 2021 reached 4.69% — the highest it has ever been since 1990. This provokes fear into many Americans as they worry about price increases for their everyday goods while their incomes remain stagnant.
Employed senior Sarah Kustes has noticed inflation in her everyday life with coffee prices. “I used to get coffee frequently, but now I try to limit myself to around once a week and make most of my coffee at home,” she said. “An extra dollar per coffee doesn’t seem that much, but it can really add up.”
Inflation is about the slight increases in the cost of items, and unfortunately, it is not just the price of a latte that is increasing. The price of groceries has also gone up, and, unlike coffee, food is not something people can just quit buying.
While prices for everything seem to be increasing, the Iowa minimum wage remains the same. At $7.25 per hour, some make the equivalent of a latte per hour. The already nearly impossible standard of living off minimum wage or somewhere close becomes even more challenging when the price of essential goods increases. Thus, the increase in inflation is most harmful to lower income households.
This is a very complex matter for a multitude of reasons. The government increased the money supply in circulation when they provided stimulus checks for a number of individuals during the pandemic. An increase in the money supply directly leads to an increase in inflation. While stimulus checks most likely helped people with financial burdens in the short run, their lasting impact causes current inflation to be at a slightly higher level.
America is left in distress as it is forced to come up with a simple answer to a very complex question. It is forced to decide if it is worth it to help those with lower incomes in the short run, knowing it will eventually end up harming them in the long run, or not help them at all. Everyone has their own idea when it comes to this, further complicating the issue.
If inflation is inevitable or necessary, the government has a few things it can do to combat the rise. It could slowly raise interest rates which can slightly discourage spending. It can also implement price controls to prevent certain goods from getting too expensive.
In the U.S. economy, it is natural to see inflation fluctuate as the country navigates through changes. If inflation was not affected at all due to the pandemic, there may be an even larger problem; the rise we have experienced is just part of the cycle.
Although worrying about current inflation is not outlandish, there is not yet an extreme danger. That said, if inflation continues to rise and the money supply is increased further, there is potential for extreme danger.
The inflation rate is constantly monitored by the government, so in theory, nothing should get too out of hand if they can keep up. Therefore, once again, the fate of Americans, especially in the lower class, lies in the hands of the U.S. government.