LETTERS TO THE EDITOR

Here is the real cause of inflation

From the PJS article entitled “American consumer prices heat up in March,” it’s apparent that the Biden administration and its supporters point to corporate “greed” as the primary driver for the inflation we’re all feeling. However, a quick examination of the law of supply and demand, which governs all aspects of a free, capitalist economy, reveals the real cause.

When the demand for goods and services is in balance with the supply of those goods and services, prices for same are stable.

When, however, there is an increase in demand (e.g., more money in the hands of the populace) for those goods/services or a decrease in the supply of those goods/services, the price for those goods and services will increase.

While there were some supply chain issues that temporarily decreased the availability of certain goods, that occurrence caused the price of those goods to increase, but those issues were relatively short lived and their prices quickly stabilized thereafter.

To give some context to the numbers which follow, the total U.S. economy is about $27 trillion/year. When nearly $4 trillion — from the American Rescue Plan Act ($1.9 trillion); Infrastructure Investment and Jobs Act ($1.2 trillion); and Inflation Reduction Act ($.89 trillion) — was injected into the economy by the Biden administration, the demand for the goods/services drastically increased, resulting in higher prices for same: the very definition of inflation. This shouldn’t be a mystery to the Biden administration, and its denial of responsibility for the inflation we have been and are still experiencing is disingenuous.

J.W. Keen, Morton