Inflation
Elise Keesler
The annual inflation rate for this year in the United States is 5.3% just from this past year.
Inflation is an increase of the money supply and only the government can raise that. Inflation causes prices to rise but rising prices are not inflation. If the government keeps printing money it can benefit them but not the people. As they keep printing money the government does not need to set a budget either because well they are the government.
Progress throughout the previous months:
The first recorded hyperinflation was in France during the French revolution. It was up 143%. Germany in October 1923 had 29,500% of hyperinflation. Germanys papermarks would not solve the war reparations as the Treaty of Versailles required the payment be in either gold or another equivalent. For over a year and a half they dealt with this problem as they did not pay the money. As of 2018, Venezuelas inflation rate is at 65,374%. It has come down to 5,500% this year which is still insane.
Pertaining to this year, the Biden administration has given certain amounts of money to everyone even if some did not need it. It may look as though this is beneficial but now since then gas prices have risen through the roof, groceries are now costing more money, and housing is much more expensive. More dollars are now competing for the same amount of whatever item. Prices must rise for everything when there is more money being printed. At this point everything is going to get higher in price. Literally everything. Is it really worth it?
https://www.politifact.com/factchecks/2021/jul/29/rick-scott/blame-joe-biden-inflation-most-government-spending/
https://www.usinflationcalculator.com/inflation/current-inflation-rates/
https://www.cnbc.com/2011/02/14/The-Worst-Hyperinflation-Situations-of-All-Time.html
The infaltion and the rising prices in the past months in America is crazy. And over the years the inflation going up over the years could be from the pandemic and it keep rising because of the governments increase of good and services.
ReplyDeleteI really like this post. You explained what inflation is very well and it's easy to understand. I also liked how you added the inflation rate of the United States over the course of months and years. You did well by adding information about our current administration and how it relates to the economy in the United States.
ReplyDeleteI chose to read this article because I always ask myself "why can't the government hand out more money?" or "why can't they just give people more money and keep prices the same price?" and the last paragraph gave me some clarification as to why we can't do that. However, I am sure there is a way to evenly distribute money handouts in a more efficient and beneficial way. I really liked how you brought up the hyperinflation in France during the French Revolution to tie in history and make it more interesting.
ReplyDeleteBefore reading this post, I was a little unclear about inflation and everything that it entailed. After reading this post, I am a lot more knowledgeable about this topic. I think the thing that stood out to me the most in this post was the fact that inlfation in America is only going to keep growing in the coming months. This is going to be very inconvinent to someone like me who already has no money for gas. Something that I wish was added in this post is how does inflation go back down to a "normal" level, whatever America's normal is. Overall, this post did open my eyes to the world of inflation.
ReplyDeleteTo answer the question at the end, no I don't think it's worth it. We've seen inflation recently now more than ever in the U.S., and no one enjoys it. Gas is expensive, houses and mortgages are expensive, and grocery items are expensive. Part of this happening is stimulus checks as the second paragraph stated. I support the idea of the government helping out people financially during times where lots of people were out of work, but the way it was done was not effective. You cannot simply take money from somewhere and give it to people without that money being missing somewhere else. In the long run, stimulus checks were not worth it as we are paying the repercussions now.
ReplyDeleteRising prices is a big issue nowadays. Regularly I hear people talking about gas, lumber, copper wiring and other rising costs. Although I doubt that the stimulus checks Americans received are the biggest contribution to this (However it definitely did contribute). I’m sure that many of these companies were hit hard during Covid and in some ways are still recovering. I would have thought that Covid was mainly responsible for the rise of inflation, however the inflation rate went down in 2020. Perhaps it is an after effect and the government is increasing spending to help get things back to normal.
ReplyDeleteIncrease of money supply, does that mean more money is being printed? Wouldn't that decrease the value of the US dollar? In a free market economy the business owners make the decisions on prices and such, if there is inflation in the economy wouldn’t that force the owners hand to raise their prices? So that would lead to a more command market essentially since they are puppeting the owners to raise prices if they want to stay in business.
ReplyDeleteIt is very surprising that some countries can go up tens and thousands of percent. I find it very interesting that countries get up to 65,000 percent than go down to 5,500 in 3 years. In 2018 when Venezuela went up to 65,000 percent, I bet it was very rough because the prices would have been extremely high and the people that are poor wouldn't have enough money to get any of their necessities. Venezuela must have came to a consensus because they went from 65,000 to 5,500 in three years. Those three years must have been rough too just from figuring out how to drop 60,000 percent in three years.
ReplyDeleteI came into this blog post already having some knowledge/understanding of inflation and how it works. Reading into your post taught me a few new things that I either didn't know or had forgotten. For example, I had completely forgotten that the Biden administration had given out some money which then caused the prices to go up as well. I came in here kind of expecting you to have not said anything about gas prices and that I was going to include it into my comment, but you did so I don't have to(even though I greatly don't appreciate that they are so high). I did the Econ presentation we just finished on Germany and was surprised to see quite how high their inflation got because of a couple of bad choices, and even rereading that stat is mind boggling.
ReplyDeleteThe contrast between the inflation rate of January to now is crazy! I certainly have noticed an increase in gas pricing with trying to budget my spending, which has been very inconvenient. This definitely helped me understand how inflation works in simple, easy to understand, terms. It's funny to think about that not even 2 years ago, if you had asked me how to solve national debt or inflation, I would've said to print more money!
ReplyDeleteI don't know why Biden gave everyone in America money it just caused a whole slew of problems that we really didn't need. Yes, give it to those who need it, but a lot of people didn't. Anyways, you're explanation of inflation was well thought out and easy to understand, and I really liked how you related some of America's problems with a example from the past. It just brings the topic full circle. Also, how did Venezuela get from 65,000 to 5,500 in just three years?
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ReplyDeleteWhat could happen to our economy if the biden administration continues this spree of reckless government spending? Could the US as a country have such a high inflation to the point other countries will have to bail us out like we did with Germany after WW1? It would also have been powerful in your argument to talk about exactly where the spending went instead of the vague “to everyone even if some didn’t need it,”. As this can then lead to people not wanting to work due to higher benefits from sitting at home which then lead to more problems and more inflation which repeated the cycle.
I don't think it is worth it. With rising prices, everyone will be at the same place they have always been, even if they receive money from the government. It is like saying you’ve been given half of a pie, but then the other half of the pie is again a whole pie. When you are given money from the government but prices rise, you aren’t earning anything from the government. Yes you are earning money, but in the end you are having to pay more for whatever you buy instead of working for your money and keeping the prices lower. If something is given to you, but the price doubles in size, you are then still having to work for what you weren’t given, and if the government sends out more money to counteract this, the prices will just be driven even higher.
ReplyDeleteit is very surprising how some countries think they can increase there money by printing more money however that's the exact opposite where the country in imports and exports will have to give more money for the import and export of goods with that if the country is not self sufficient you will actually harm your country more then help your people
ReplyDeleteI thought that this was a very important topic to cover, mostly because inflation is a reoccurring part of many economic discussions. I've always wondered what the root of high inflation is and why some countries like Venezuela, in this piece, have such a high level of it. It was interesting to learn even more about Germany and the first instance of inflation and the immense amount of time it took to come back from that and lower it to a tolerable level. Connecting with this piece, it seems as though inflation is such a large issue because it wouldn't cause any discontent for the government, rather, it effects everyday people in each country, coming from different backgrounds and levels of wealth.
ReplyDeleteI was surprised that Venezuela had more inflation then when Germany had back 1923. But, I was also wondering how inflation from Venezuela got that high and how did the rate of inflation go down? What lead to the sudden increase on inflation in Venezuela?
ReplyDeleteI came into reading this blog post only knowing that inflation increases the price of good, but I wonder if it increases the price of services as well. I thought that it was very interesting how the inflation percentages from 10 years ago has increased so much. Because I know from history that there has been times where inflation has made our national economy weak. An increase inflation of 5.3% is definitely enough to see changes in GDP per capita because it could easily slowly over time makes the poor get poorer, and the rich less rich. I thought that inflation was caused by the free market naturally changing but in said in her blog that only the government could increase inflation. Which i thought was very interesting that even as free market as America is the government still has control over inflation. It was also surprising to see how inflation can rapidly fluctuate between months.
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