Even “low” inflation, the 2% sort we have experienced in recent years, erodes the value of savings, but people stopped paying attention to it as a political issue. Now that the Fed has been creating money at a very rapid clip to help the government pay for its prodigious new expenditures, we’re sure to see it become an issue again.
In this article, FEE president Lawrence Reed gets down to basics in explaining what inflation is and why we should care about it.
It’s crucial that people understand that inflation (that is, rising prices, the most observable consequence of inflation of the money supply) is not caused by greedy business people, by nasty foreigners, by shadowy manipulators, but is due to the government’s expansion of the supply of money, done to cover its spending by cheapening the dollar.
