Inflation Situation!

 A. Macro level: What happened?

We have inflation because our government has printed too much new money, compared to the size of the economy and its growth rate.* Recent giveaways (to virtually all taxpayers) have put more money in the hands of consumers, and when they have more money to spend on a limited supply of goods and services, the prices will go up (that is demand-side inflation). And if those goods and services are scarce (because of recent supply chain issues**, then prices go up more (this is supply-side inflation). We're seeing the worst inflation rate since the 1980s. 

*The US government has spent itself into a black hole from which there may be no escape: We punish any politician who even timidly suggests a balanced federal budget, and therefore we continue spending more on federal programs than incoming tax revenue can pay for. So we borrow the difference, creating a burgeoning mountain of unpayable debt that will destroy the lives of our future generations. For a nation that is fighting so hard over whether to allow the termination of fetuses, we aren't focusing at all on our ruining their future lives once they grow up! The only way the government can deal with the debt is to pay it back with lower-value dollars--dollars that are worth much less due to the ravages of inflation. The problem with that is this: Inflation hurts almost everyone. It will reduce almost everyone's standard of living. It will throw more and more people into poverty. And if you think your Social Security income is safe because it's inflation-indexed, think again: The real inflation rate is probably about twice the gerrymandered reported inflation rate. Of course it's in our government's interest to find ways to construct an incorrect, artificially-low official reported inflation rate, and that is exactly what they do. What a great country!

**Our supply chain woes are a direct result of capitalism and poor US corporate management: Because maximizing profit is the Big Goal, companies have reduced costs as much as possible, in stupid disregard of the risks. They came to rely on cheap labor from overseas, and Spartan "just in time" inventory practices, but without local sources of labor  and without redundant sources of supply, and without adequate inventory, it doesn't take much--an epidemic, a trade dispute--and suddenly the cart is in the ditch. This didn't just "happen," the same way that a meteorite can strike a building--no, this is a result of terrible management, and yet senior officers of large companies everywhere are paid many times more than what their lackluster performance merits. What a great country!

B. Micro level: Some tips for surviving this hopefully temporary bout of high inflation:

1. Eat out less; cook in more. Save about 75% each time you don't eat out. And "cook in" means use raw food as the ingredients, not buying a finished meal at the grocery store. This can be much healthier than eating either prepared food or eating out.

2. Always check for what's on sale, in case you find something great that you suddenly want for dinner. So if veggies aren't on your list that day, check the produce anyway. I just found a 3-lb bag of small yellow onions for $0.99.

3. Red meats and poultry, on their last day are usually marked down 30% but still taste good. Freeze them, if you aren't going to eat them that day. I do not recommend eating fish on its last day, but sometimes it's OK.

4. Eat half your lunches and dinners as vegetarian. Healthier, and so much cheaper.

5. Bend over and scrutinize the lower shelves in the grocery store-that's where the bargains sometimes are.

6. Drop the Starbucks, and brew at home. Save about 75% of the cost, and your coffee will be much better, too. Many things to like about Starbucks, but their coffee really sucks. An amazing success story, for a company that burns/scorches/ruins its primary product. Shop around, and take your best palate to the effort, and you can find single-nation coffees that are mind-blowingly wonderful!

7. If you're on city water, try to use less water in the winter--don't flush as often; take shorter showers and few baths. This is because the water utility uses your winter usage to estimate your use of the public sewer year-round (in summer, we all use a lot of water outdoors, which doesn't hit the sewer). So by keeping your winter water use low, you save money all year long.

8. Keep the thermostat as close to the outside temp as you can stand it, and seal up any bad leaks in your house if you can.

Just the above changes could save each of us thousands over the course of a year.

(photo credit: 123rf.com)

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