[American Thinker] You couldn’t miss the headlines: The annual percentage increase in inflation clocked in at 7.5%, making it the worst increase in 40 years. For anyone on a fixed income, living off of savings, or in a low-paying job, this is a disaster. Rich people don’t feel it (much) but ordinary people do. But here’s the kicker: Inflation is almost certainly worse than it was 40 and more years ago. Moreover, because the government is in thrall to Modern Monetary Theory, it’s going to get worse, lots worse. And all the while, China is sitting there, watching and waiting.Inflation destroys wealth. People’s salaries never keep up with the inflation rate and the elderly aren’t earning more money so their savings can only lose purchasing power. It also hits the poorest people the hardest, making it completely regressive. That’s why a news report like this one strikes terror in the heart of both citizens and the political party in charge:
A relentless surge in U.S. inflation reached another four-decade high last month, accelerating to a 7.5% annual rate as strong consumer demand collided with pandemic-related supply disruptions.That "40-year" number, though, is misleading. Certainly, inflation has shot up with incredible speed, as happened in 1982, but real inflation is probably even worse than the accelerated rate suggests. That’s because, in 1990, the government changed how it calculated inflation (something it also did in 1980). John Williams’s Shadow Government Statistics calculates inflation as it would have been calculated before 1980 and before 1990. According to his numbers, inflation would have been over 15% using pre-1980 metrics and over 10% using pre-1990 metrics.
The Labor Department on Thursday said the consumer-price index—which measures what consumers pay for goods and services—in January reached its highest level since February 1982, when compared with the same month a year ago. That put inflation above December’s 7% annual rate and well above the 1.8% annual rate for inflation in 2019 ahead of the pandemic.
The so-called core price index, which excludes the often volatile categories of food and energy, climbed 6% in January from a year earlier. That was a sharper rise than December’s 5.5% increase and the highest rate in nearly 40 years.
You don’t need the numbers, though, to tell you what you already know. It’s getting increasingly hard to afford life’s necessities.