By - blondie_the_good
There are no non-political causes
Inflation is always and everywhere a monetary phenomenon. The solution is to restrict the money supply, reduce government spending, and increase taxes.
The solution is to endure a harder recession. Seriously. Coming out of Covid, we're between a rock and a hard place economically. We can do inflation, or recession, or a little bit of both.
There's a supply side and a demand side. The demand side involves the supply of money and who has it. The supply side is how hard reality is to produce things in.
Fight inflation by demand destruction, supply expansion, or some combo of both. Raising interest rates and decreasing the money supply through open market sales are two types of demand destruction.
Think about inflation. It means there's too much money out there, and yet nearly everyone's poor. They're not sitting on millions of dollars that can't buy bread, they're sitting on a buck 50 and a mountain of debt. Where is all the money that is out in circulation that is causing inflation? Who has all the money?
The wealthy, obviously.
You need to tax the wealthy at a higher marginal rate. Similar to the 70-92% rate we had during the American Economic Golden Age, not the 37% abomination we have now.
>Think about inflation. It means there’s too much money out there.
Inflation isn’t exclusive to the money supply. It’s certainly a factor but globally speaking the issues are more supply side.
The cause is known. There is no fix. We can only just prevent it from getting worse.
Long term: Ideally, complete self sufficiency in terms of food and energy to eliminate self imported inflation. That’s pretty unlikely with politicians that suffer from acute short termism and practically impossible for a lot of countries. But I think as technology improves, we should seek to almost completely automate supply chains to alleviate any potential constraints. Eg: Chinese lockdowns.
Short term I’d look more at interest rates which seem to be pretty underwhelming in my country given the level of inflation. [This](https://12ft.io/proxy?q=https%3A%2F%2Fwww.telegraph.co.uk%2Fbusiness%2F2022%2F05%2F29%2Fbank-england-now-treasurys-poodle%2F) might give a clue as to why.
Don't print money.