There are many factors that drive inflationary trends. Easy money policies at the Federal Reserve can trigger higher costs for commodities, while excessive business regulations, consumer debt, unbalanced supply and demand, and tax hikes can generate the long-term inflation we are now experiencing. Moreover, spending billions of dollars on social services for unlawful immigrants can also generate an upturn in the consumer price index (CPI).
Long-term inflation can force families to conserve on energy usage, select cheaper items at the grocery store, defer spending, and have less discretionary income. It can also hamper the ability of families or individuals to purchase or rent affordable housing accommodations. Persistent inflation forces many folks to take on two or three jobs, and some have to drop out of higher education in order to survive.
Some claim that inflation has been tamed, but have they been out shopping or filled up their gas tanks at a fueling station lately? Have they noticed the more expensive yet smaller portions of food at most restaurants? Inflation has risen over the past three years, and wages haven’t kept pace with the yearly inflation rate.
What are some common sense solutions to stubborn inflation? Businesses and families must avoid going into a cycle of debt or else they could lose almost everything. They need to have the means to pay off debt as well. If that is the case, why can’t the federal and state governments live within their means and seriously work to pay down debt by streamlining agencies and eliminating redundant programs?
Since public education is a local and state function, the federal Department of Education could be shuttered. Taxpayers wouldn’t be left on the hook if student loans were privatized, and scofflaws would be motivated to repay their debts according to bank loan standards.
Moreover, all health and welfare programs ought to be scrutinized to root out fraud and waste. Most of these national and state “entitlements” have become bloated bureaucratic agencies more concerned with maintaining their existence than promoting the general welfare. They also discourage intact families, hard work, and personal responsibility.
Every agency should be examined with a fine-toothed comb to reveal if their existence is justified in relation to the prudent use of taxpayer dollars. Furthermore, Sacramento and Washington, D.C. ought to get out of the business of subsidizing favored industries in the private sector. The free market is much better suited to pick winners and losers through competition than government bureaucrats. Businesses should fail or succeed on their own merits. A prime example of private/public cronyism was the failure of solar panel producer Solyndra during President Barack Obama’s tenure. The company went bankrupt, and taxpayers had to foot the $500 million loss.
In addition to streamlining government agencies, government officials ought to brainstorm methods to generate economic growth such as reducing the regulatory and tax burdens that businesses and individuals must comply with. Tax cuts could ignite business growth, reduce unemployment, and trigger dynamic productivity which generates a greater capacity to invest, save, and, spend.
Limiting government spending is a strong factor in waking up a sleepy economy and shrinking inflation. Indeed, a fair consumption tax could be considered to replace the income tax on productivity.
Inflation reduction can also be accomplished by raising the minimum wage by 5 to 10 percent every few years. This wage is a starter wage for younger folks as they enter the labor force on a long journey toward upward mobility. Hiking this wage too often can raise business costs for employers which are passed on to consumers, including the employees who received the wage increase. It can also make employees casualties of automation, job loss, or shorter working hours.
Another variable that can drive economic upturns is the critical energy industry. While hydroelectric, nuclear, solar, and wind power have a role to play, the demand for oil and natural gas will continue for several decades. California and other states should apply clean extraction and refining methods to fuel the economy that already has tough emissions standards. If development were ramped up, fuel costs would decrease.
Additionally, businesses ought to oppose the environment, social, and governance (ESG) guidelines imposed by arrogant global or national governing bodies. Corporations are in business to make profits for their employees and shareholders and not distant entities. They earn profits by producing goods and services that consumers want. Moreover, they are often better stewards of the environment and humanitarian projects than woke bureaucrats.
Finally, if all of the aforementioned inflation reduction methods are implemented, California and the federal government can restore better fiscal sanity and refrain from spending on boondoggles. This will help to facilitate economic growth and trade, decrease inflationary trends, promote investing and saving, and improve living standards. Most current government programs can be handled locally since the primary roles of government are the protection of our natural liberties and the enforcement of existing laws.
