Inflation has been in the news a lot lately. The massive money pumping the Federal Reserve began in 2020 has finally got people’s attention, and is no longer a topic for just economists and free market advocates.
CNN last week reported that price increases recently hit a three-decade high and 25 percent of Americans say their standard of living has fallen. Speaking on CNBC’s “Squawk Box,” Home Depot founder Ken Langone noted that “inflation is a regressive tax [that] hits poor people hardest.” On CNBC’s sister network, MSNBC, host Joy Reid noted that “unless you’ve been living under a rock your money isn’t going as far as it used to, with higher prices on gas, food and your energy bills.”
Even the late night comedy show hosts are talking about inflation.
“Right now inflation is the one thing people hate even more than Jake Gyllenhaal,” Daily Show host Trevor Noah quipped. “It seems like everything is more expensive these days. Groceries are more expensive. Cars are more expensive.”
Noah wasn’t done.
“I went to a gas station today,” Noah joked, “and for a gallon of regular, it just said ‘kill yourself.’”
Inflation: How Worried Should We Be?
Most people understand what inflation is, but in case you don’t, let’s define it. Inflation is essentially an increase in the supply of money. That’s basically it, and this was the standard definition of inflation for centuries, economist Joseph Salerno notes. Economists later added a second definition describing inflation as “a general and sustained increase in prices.”