What causes inflation?
I will cover all the reasons and not just the sabotage of Trump. What is so damaging is that all factors that contribute to inflation are happening at the same time.
Most Republicans will be shocked to find out that the cause isn't Dark Brandon and now Kamala Harris or the next Democrat in the White House, pulling red levers in the Oval Office.
One very simple answer in that a strong economy can lead to inflation.
CURRENT AND PAST INFLATION RATES
Corporate Power and Greed
Price Gouging
The Economic Policy Institute
Corporate profits have contributed disproportionately to inflation. How should policymakers respond?
What else causes inflation?
It is simple economics. Unfortunately, almost no Americans have any education in economics. Therefore, it is easy for people to get away with lying about inflation.
At its root, inflation is driven by too much demand relative to supply.
“Inflation occurs when the aggregate quantity of goods demanded at any particular price level is rising more quickly than the aggregate quantity of goods supplied at that price level.” ~Ben Bernanke
But what caused demand to outpace supply?
1. Output (how much an economy produces) Supply shocks:
Inflation often happens because of supply shocks — major disruptions to an important economic input, like energy. For example, if a lot of oil fields stop producing oil because of a war, the price of energy increases. Since energy is a critical input into almost every other good, prices of other things rise, too. This is often called “cost-push inflation.”
COVID-19 inflation was a supply shock
The Covid-19 pandemic was the biggest cause of Inflation for the World.
How Donald Trump Deliberately Used the Covid-19 Coronavirus Pandemic to Mass Murder Hundreds of Thousands of American Citizens - See the Documentaries, Research, and Studies
The Official Trump Recession (March-April 2020)
Official Recession Definition
During a recession, the economy struggles, people lose work, companies make fewer sales and the country’s overall economic output declines. The point where the economy officially falls into a recession depends on a variety of factors.
In 1974, economist Julius Shiskin came up with a few rules of thumb to define a recession: The most popular was two consecutive quarters of declining GDP. A healthy economy expands over time, so two quarters in a row of contracting output suggests there are serious underlying problems, according to Shiskin. This definition of a recession became a common standard over the years.
The National Bureau of Economic Research (NBER) is generally recognized as the authority that defines the starting and ending dates of U.S. recessions. NBER has its own definition of what constitutes a recession, namely “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.”
*Economic Factors Causing The Official Trump Recession, started before Covid-19.
Almost ALL of the Media Won't Even Mention the 2020 Trump Recession, and if they do, it is called the Covid-19 Recession but Almost Never Discuss the Resulting World-Wide Covid-19 Inflation. Lots of the media purges the entire year of 2020 from Trump's Economic Record.
Biden/Harris Inflation Reduction Act Results
America Leads All G7 Nations in Covid-19 World Inflation Recovery
How Trump Publicly Forced OPEC to Slash Oil Production to Raise Gas Prices and then Bragged About it Before Leaving Office to Hurt Joe Biden's Presidency and Help His Upcoming Campaign
Higher Gas Prices cause a serious domino effect chain reaction for Inflation, as the cost to ship and deliver increase. This extra cost is passed along to consumers.
The Russian War
Oil markets were roiled when Russia, the #3 producer, a petro-state, whose exports supply 8 percent of the global oil supply, used its fossil fuel earnings to finance another unjust war. This war had a major impact global markets as oil supply decreased.
2. Money (how much currency people have or can easily get their hands on)
Money supply: Then there’s the demand side of the equation. An increase in the money supply will tend to cause inflation, as Moss explains. “With more cash in their pockets and bank accounts, consumers often find new reasons to buy things,” he writes in the book. “But unless the supply of goods and services has increased in the meantime, the consumers’ mounting demand for products will simply bid up prices, thus stoking inflation.
When Covid-19 began, Trump Quickly had over 3 Trillion Dollars Printed.
3. Expectations (what people think will happen next)
Expectations and spirals: In many models of inflation, the cause isn’t an increase in the money supply but an unanticipated increase in the money supply. The intuition is that if everyone knows demand will increase (because there’s more money flowing) then supply will increase to match it. It’s the unexpected increase in demand (or decrease in supply) that sets off inflation.
4. Low Unemployment and Inflation
It’s when an economy is operating very close to its full potential — when there’s very little slack — that inflation often happens. For that reason, inflation is more common when unemployment is low. When most available workers have jobs, they have the ability to demand higher wages, which can increase prices. And there aren’t many workers available to cope with any extra demand that arises. That’s when you get too much money chasing too few goods.
5. How does raising interest rates help inflation?
Central banks use interest rates to control demand and inflation. If inflation is high, they raise their target for short-term interest rates. Higher interest rates make borrowing costs less attractive for firms and consumers, which leads to less demand for goods and investment. Since inflation is caused by demand outstripping supply, lowering demand to bring it in line with supply relieves the pressures that were raising prices.
Inflation rises when the Federal Reserve sets too low of an interest rate or when the growth of money supply increases too rapidly – as we are seeing now, says Stanford economist John Taylor.
The Trump Administration Decimated Interest Rates
6. Trump's Tax Cuts for the Rich
The Center on Budget and Policy Priorities (CBPP)
The 2017 Trump Tax Law Was Skewed to the Rich, Expensive, and Failed to Deliver on Its Promises
The Center for American Progress
The TCJA 2 Years Later: Corporations, Not Workers, Are the Big Winners. The massive corporate tax cut is costing more than expected and not trickling down to workers.
The Brookings Institution
The middle class needs a tax cut: Trump didn’t give it to them
The Center for American Progress Action Fund
APR 15, 2024 The Middle Class Will Pay the Price for Trump’s Tax Cuts for the Wealthy, Including Repealing the Affordable Care Act
Former President Donald Trump has proposed tax cuts of up to $400,000 for the wealthiest households—that middle-class Americans would fund through higher living costs.
7. National Debt
President Trump approved $8.8 trillion of gross new borrowing
and $443 billion of deficit reduction during his full presidential term.
President Biden has so far approved $6.2 trillion of gross new borrowing
and $1.9 trillion of deficit reduction.
8. Tariffs Slightly Increase Inflation
Fortune: Trump’s tariffs could spark a trade war and an ‘inflation shock’ within a year, expert warns
More Basic Inflation Info:
Cost-push inflation occurs when prices rise because production costs increase, such as raw materials and wages. The demand for goods is unchanged while the supply of goods declines due to the higher costs of production. As a result, the added costs of production are passed onto consumers in the form of higher prices for the finished goods.
Demand-pull inflation can be caused by strong consumer demand for a product or service. When there's a surge in demand for a wide breadth of goods across an economy, their prices tend to increase. While this is not often a concern for short-term imbalances of supply and demand, sustained demand can reverberate in the economy and raise costs for other goods; the result is demand-pull inflation.
Built-In Inflation and Rising Wages
Built-in inflation occurs when enough people expect inflation to continue in the future. As the price of goods and services rises, people may come to believe in a continuous rise in the future at a similar rate. Because of these shared expectations, workers may start to demand higher wages in order to anticipate rising prices and maintain their standard of living. Increased wages would result in higher costs for businesses, which may pass those costs on to consumers. Higher wages also increase consumers' disposable income, increasing the demand for goods that can push prices even higher. A wage-price spiral can then be set in place as one factor feeds back into the other and vice-versa.
The Housing Market
The housing market, for example, has seen its ups and downs over the years. If homes are in demand because the economy is experiencing an expansion, home prices will rise. The demand also impacts ancillary products and services that support the housing industry. Construction products such as lumber and steel, as well as the nails and rivets used in homes, might all see increases in demand resulting from higher demand for homes.
Expansionary Fiscal and Monetary Policy
Expansionary fiscal policy by governments can increase the amount of discretionary income for both businesses and consumers. If a government cuts taxes, businesses may spend it on capital improvements, employee compensation, or new hiring. Consumers may purchase more goods as well. The government could also stimulate the economy by increasing spending on infrastructure projects. The result could be an increase in demand for goods and services, leading to price increases.
Monetary Devaluation
Monetarists understand inflation to be caused by too many dollars chasing too few goods. In other words, the supply of money has grown too large. According to this theory, money's value is subject to the law of supply and demand, just like any other good in the market. As the supply grows, the value goes down. If the value of money goes down, its purchasing power drops and things become relatively more expensive.
Further Research
Exposing Donald Trump, the Trump Crime Family, and the Republican Terrorist Organization behind him
How Donald Trump Deliberately Sabotaged America Just Before Leaving Office and During the Past 4 Years: Covid-19, Border Crisis, Afghanistan, Gas Prices, and Inflation
How Donald Trump Deliberately Caused the Border Crisis, Sabotaged the Immigration Courts, and Prevented America From Fixing it so He Could Use it as a Political Weapon to Help His Campaign (3 Parts)
Part 1: How A President Trump Deliberately: Caused the Border Crisis, Destroyed Latin American Economies, Sabotaged the Immigration Courts, and Failed at Securing the Border
Part 2: How Trump prevented Republicans and Biden/Harris From Fixing the Border Crisis so he Could use it as a Political Weapon to Help his Campaign (In progress)
Part 3: Trump and Republicans Flood the Media with Thousands of Border Lies (In progress)
How Trump Publicly Forced OPEC to Slash Oil Production to Raise Gas Prices and then Bragged About it Before Leaving Office to Hurt Joe Biden's Presidency and Help His Upcoming Campaign
Part 1: Trump's 920 Page, "Project 2025" Nazi Manifesto Blueprint, Dictatorship Plan, and Authoritarian Platform If He Wins the 2024 Election
PART 2: Why Donald Trump is Suddenly Lying and Pretending to be Running From His Own 920 Page, "Project 2025" Nazi Manifesto Platform
How Donald Trump used the pandemic to mass murder hundreds of thousands of How Donald Trump Deliberately Used the Covid-19 Coronavirus Pandemic to Mass Murder Hundreds of Thousands of American Citizens - See the Documentaries, Research, and Studies
Donald Trump's Sexual Deviance Addictions and Serial Sexual Crimes
Donald Trump's 15 year close friendship with Jeffrey Epstein and Ghislaine Maxwell, as they ran the largest human trafficking pedophile rape ring in history and his scheme to help them
Why you should vote for Kamala Harris. See her full Resume, Achievements, Accomplishments, Plans, and Platform
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