Because prices for goods and services are all relative to the amount of money circulating in an economy.
The US has been operating at a deficit for over 30 years now, in addition to ~15 years of near-0% interest rates. The amount of ’new’ money flooding in is obscene, and is largely to blame for the massive rate of inflation seen across the board.
In an ideal scenario, deficit alternating would be directed towards the lower income brackets, as those funds would circulate through the economy multiple times before winding up in the back accounts of the Uber-wealthy eventually.
Unfortunately what has been happening since the 80’s in the US (and the west more broadly), is that the vast majority this ‘new’ money is issued directly to the most wealthy portion of society, who then use it to buy up essential goods and services (eg. Housing) as an investment vehicle; lifting the prices across the board without any means for the remainder of society to be able to continue to afford necessities like shelter.
Circling back around to my first sentence, imagine that the amount of roubles in the economy doubled overnight, and all of that new wealth was given to the richest 100 oligarchs.
They would likely buy out the majority of apartments in and around Moscow, skyrocketing their value due to the increased demand, jack up rent as high as possible and squeeze every last rouble out of the general population who won’t have seen any increase in their wages.
Because prices for goods and services are all relative to the amount of money circulating in an economy.
The US has been operating at a deficit for over 30 years now, in addition to ~15 years of near-0% interest rates. The amount of ’new’ money flooding in is obscene, and is largely to blame for the massive rate of inflation seen across the board.
In an ideal scenario, deficit alternating would be directed towards the lower income brackets, as those funds would circulate through the economy multiple times before winding up in the back accounts of the Uber-wealthy eventually.
Unfortunately what has been happening since the 80’s in the US (and the west more broadly), is that the vast majority this ‘new’ money is issued directly to the most wealthy portion of society, who then use it to buy up essential goods and services (eg. Housing) as an investment vehicle; lifting the prices across the board without any means for the remainder of society to be able to continue to afford necessities like shelter.
Circling back around to my first sentence, imagine that the amount of roubles in the economy doubled overnight, and all of that new wealth was given to the richest 100 oligarchs.
They would likely buy out the majority of apartments in and around Moscow, skyrocketing their value due to the increased demand, jack up rent as high as possible and squeeze every last rouble out of the general population who won’t have seen any increase in their wages.
Damn, I am sad again.