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Three Worrying Side Effects Of Inflation In Addition To Higher Prices
Everyone talks about reduced buying power and skyrocketing costs but these things are problematic as well
The economy is a tangled mess as COVID-19, and the response continues to restrict the flow of goods and services. Supply lines have been stretched to their breaking point due to international travel restrictions and a shortage of critical workers such as truck drivers. This has shown up in big and small ways, including a global shortage of microchips and the inability to find fiberglass doors. These supply issues have driven up prices across the board. Gas is up, lumber was historically high for a period, and food prices are climbing.
The result is that the United States briefly saw inflation hit 5.4%, which is double what the “ideal” inflation rate should be. When inflation goes up, people start to talk about reduced buying power, how saving is worthless because you’ll make less than you’ll lose on inflation, and how retirement accounts are vulnerable. But there are other effects that inflation can have on the economy that is not talked about as often.
Higher taxes
This tax hike can pass without Congress. Higher prices mean higher taxes at the register. Everyone…
