Senior Reflects Upon The Rise of Inflation

There has been a significant spike in inflation both within the U.S. and abroad within the past year, and this has led consumers to ask several questions about their financial institutions. What are the causes behind this sudden increase, and what are we doing to combat it? 

This issue traces its roots all the way back to early 2020 when the COVID-19 pandemic hit and the world at large experienced increased demand for all types of products, from food to toilet paper. The pandemic also had several other effects on the world economy, including increasing production costs for all sorts of items. While this was a short-term issue, with lockdowns being lifted and the world seeming less chaotic over time, the worldwide economy is still feeling the long-term effects of this event. 

Such effects are still being seen years later as the U.S. inflation rate rose to 6.8% in 2021, the highest point since 1982, according to the Guardian. What this means on a long-term timeline is yet to be seen, however, it is guaranteed that inflation will most likely worsen unless the U.S. government, and governments all across the world, do something about it. 

Another more recent cause behind inflation and economic turmoil in general is Russia’s invasion of Ukraine. According to dw.com, Ukraine accounts for 11.5% of the world wheat market and 17% of the world’s corn market. This major event has exacerbated inflation for products such as food and biodiesel fuel. 

But what is the White House doing to combat all this turmoil within the economic realm? Earlier this year, President Joe Biden passed into law the Inflation Reduction Act, which, according to whitehouse.gov, will “lower costs for families, combat the climate crisis, reduce the deficit, and finally ask the largest corporations to pay their fair share,” this means funding more clean energy projects, such as wind turbines and solar panels, increasing Obamacare’s reach and lowering prescription drug costs for consumers and most importantly, taxing big corporations. 

This is, quite possibly, the best legislation Biden has passed within his term so far. Prescription drug costs have always been too high within this country, and corporations have never paid their fair share when it comes to taxes. It also handles climate change, which is an extremely prominent and pressing issue that needed addressing. I hope that this bill is wide-reaching enough so that Americans will not see more of the long-term effects of this recent inflation crisis.