New government data has families tightening their belts. Compared to April of last year, consumer prices have jumped by more than eight percent. Although this is the first time in eight months that inflation has decelerated (slightly), the pace remains near a 40-year high. To the dismay of Americans struggling to make ends meet and a Biden administration that’s attempting to reverse underwater approval ratings, the solution to the inflation crisis is complicated.
Out-of-control government spending and loose monetary policy at the Federal Reserve has created a feedback loop that’s difficult to stop. Too much money chasing too few goods is pushing price tags up. From there, workers are demanding higher wages in order to pay for the more expensive products. And that, in turn, pressures businesses to raise prices even further in order to cover higher labor costs.
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