As Economy Emerges From Pandemic Inflation Predictably Skyrockets

As Economy Emerges From Pandemic Inflation Predictably Skyrockets
As Economy Emerges From Pandemic Inflation Predictably Skyrockets

( – As America emerges from the pandemic, a new but predictable crisis is emerging. While governor-induced lockdowns and shutdowns of business negatively impacted many peoples’ livelihoods for nearly a year, the emerging threat will affect everyone. Prices on virtually everything you buy are rising significantly. Food, steel, plastic, gasoline, lumber, houses, rental cars, hotel rooms, and toilet paper prices are rising fast as consumer demand explodes – that’s just a small sample.

For months, economists predicted that the coming consequences would be significant. On Thursday, June 10, the Labor Department reported that inflation rose to the highest level since August 2008 (a precursor to the economic crash that spiraled America into the Great Recession). The report also stated that prices grew at an astounding 5% compared to a year ago.

In traditional times, one could point to Federal Reserve policies or government regulations and taxes as drivers of inflation. However, this time it’s very different. During the pandemic, governors closed state economies and businesses in an attempt to slow the spread of COVID-19 and “flatten the curve.” As a result, consumer demand dropped across the board, and manufacturing and supply chains were severely impacted.

As Americans head out of the house in excitement to resume life as normal, it’s coming with a high cost to their checking and saving accounts. Gasoline prices are spiking at a record pace, grocery and energy costs rose 3.8% in May from 2020 to 2021, and the cost of a car or truck exploded 7.3% in only one month.

What’s Driving the Inflation?

As consumers with upwards of a trillion dollars to spend leave the house, retailers, restaurants, manufacturers, and the supply chain can barely keep up. There’s also a labor shortage, likely due to government unemployment benefits that seduce people to stay home instead of going to work. Employers are forced to raise wages to entice people back to work. When you combine all of that with trillions of dollars of additional government spending, inflation was inevitable.

Economists warned in March this would happen. The entire problem was driven by government overreach and a lack of foresight by our leaders.

As the economy continues to overheat, the Federal Reserve will likely step in and start raising interest rates to slow the economy down. The result will be a continued rise in prices and more pain in American wallets. If Congress and the president add trillions of dollars in even more government spending, it could make a bad problem even worse.

Time will tell what the political fallout will be. Republicans will make the case that the country was warned and Democrats ignored the basic laws of economics. It’s ironic that then-President Donald Trump warned that the cure couldn’t be worse than the disease all the way back in April 2020.

And now, here we are… it may be just the beginning.

Don Purdum, Independent Political Analyst

Copyright 2021,