To the Editor,
Inflation is an Insidious tax. It increases the cost of almost everything without generating any benefits for most of us. The current inflation rate is about 5.4%, which means, on average, food, clothing, gasoline, and everyday products costs more. Economists are projecting an annual inflation rate of 6% to 9%. If your income is $28,000 a year or more, the $250 child bonus is eaten away by a 9% inflation rate.
Inflation is a direct result of more money chasing the same goods, meaning the price of everything will tend to rise. The Fed projects the need to “print more money,” to allow the government to pay its bills (because spending exceeds revenue), which will guarantee higher inflation. If Congress passes the infrastructure bill, which most economists, including the budget watchdogs, project a final cost of over 5.5 trillion dollars, it will result in higher prices. Again, spending, without additional “revenue raising measures” (taxes), will generate inflation, that’s why it is so dangerous.
Some spokespersons say inflation will go back down, whether it goes down next week or next year, the damage is already done. The prices have gone up and even if inflation goes to zero, the price of goods will not drop to pre-inflation levels. It is really a hidden tax, Congress never authorized it, but we all still have to pay it.
The President’s statement about spending to kill inflation is misguided at best, but downright dangerous if attempted. Even the Federal Reserve Chairman Jerome Powell warned that the risk of inflation “could turn out to be higher and more persistent than we expected.”
Congress needs to kill both spending bills. If Congress wants to improve our roads etc., then create a single, new, infrastructure bill for roads, bridges, dams, etc. only. Either that or provide a one-time infusion of money into the highway trust fund that has been paying for our highways. It is low on funds due to vehicles having higher gas efficiency (fewer taxed gallons of gasoline purchased) and electric vehicles do not pay a comparable tax.