This is oddly reflective of the elitism that cost the DNC it's victory. "Well actually, my poor man, a tomato is a fruit and every PhD economist knows that inflation is connected to fiscal policy's influence on the monetary supply"
The every day person uses the culinary definition of tomato, and inflation means that those tomatoes cost more at Walmart.
I would expect a botanist to know that a tomato is technically a berry, just like I would expect an economist to know that inflation is technically defined as an increase in the money supply.
Everyday people can use whatever definition they want. That doesn't mean economists, the Fed, etc should say "inflation" when they mean "price of goods".
Do you have a source? I've only ever seen it defined the traditional way. Besides, you can increase the money supply and not get inflation (defined the usual way). Inflation happens when the money supply increases more than the economy needs.
Inflation happens when money supply increases more than the value of the goods that you can purchase with that money supply. It isn't about needs, but things that can be bought, especially those with limited supplies like housing.
That definition depends on where you look, and when the definition was written. Between the roman empire and the mid 1900s inflation always referred to an increase in the money supply.
Matter-of-fact discussion of the economy didn't cause people to vote for a serial sex offender promising to execute his political rivals and purge America of immigrants. The messaging could be better but don't gaslight us. Something is very wrong with the calculus being used by a great number of Americans.
2 and 3 are the same group. Accelerationists and white Christian nationalists are just rebranded white nationalists, so there is nothing surprising there. Hard to say what the distribution of purely economic voters is given how illogical that is. I'm hesitant to believe the excuses people have given how extreme of the rest of the campaign was and its parallels to a particular historical figure, going to the point of nearly plagiarizing quotes from the man.
> vote for a serial sex offender promising to execute his political rivals and purge America of immigrants
> Something is very wrong with the calculus being used by a great number of Americans
I'm sure a lot of people, especially independents who could have swung either way, voted for Trump precisely because they were sick of this attitude.
People are free to make partisan judgments against Trump or any other politician, but they will also suffer electoral consequences if those judgments are for the most part fact-free, as in your case.
You can repeat that quip three times in the mirror and it still won't change how plainly ugly his campaign and personal actions have been. Nor have you served me, nor liberals in general, any consequences that won't also impact Trump's base to an equal or greater extent.
First, the Republicans have been running on a platform of pretend fiscal responsibility, and so deserve more criticism for the hypocrisy per their own standards. The Democrats have just been upfront about spending money.
Second, there's a huge difference between spending new money on specific policies for deliberate outcomes, and blindly dumping it into the financial sector to bid up the everything bubble as fuel for the Potemkin stock market and a handout to asset owners.
Yes he did. I've heard interesting arguments that they did some clever accounting to hide a small deficit on the books somehow, but I didn't quite follow well enough to say for sure. That technicality aside, Clinton balanced the budget and every president since has apparently thought that was a terrible idea.
Well, for one thing, monetary policy is the primary determinant of money supply, not fiscal policy.
Second, I think it is fair to say that the causes of inflation are uncertain, even among mainstream PhD economists. The quantity theory hasn't been matching empirical data, and newer theories like the fiscal theory of the price level are gaining attention.
Wittgenstien would like a word. Words always mean whatever the hell the speaker thinks they mean, which is always unverifiable. We should always endeavor to understand what people _think they mean_ instead of insisting on some (faulty) denotation.
The inflation argument is always frustrating. In a vacuum, inflating the _supply of money_ would delate the _price of money_ which inflates the _prices of goods_. Most people say "inflation" to mean the price of goods, but it does no good to insist that one definition means you can't use the word in other ways!
So I can use the word 'dog' to mean a cat? Nonsense. The purpose of words is to communicate meaning. Therefore we must agree on what that meaning is beforehand in order to communicate effectively.
What's a dog? Is a child's plastic toy in the shape of a dog a dog? Maybe. Is a cross-bread wolfhound a dog? Maybe. Language games! Meaning is "fuzzy around the edges".
If you insist a cat is a dog, we're not playing a fun game - but that's up to me and up to you - Maybe someone in an undiscovered tribe doesn't know these words and wouldn't balk. If you say "dog" when you mean to insult someone, I might know what you're saying. But there is no mechanism to verify internal meaning.
I _strongly_ suggest reading some Wittgenstien if you're interested in this topic! If I say I speak Swedish fluently but refuse to ever utter a word, do I speak Swedish? Only our actions can vaguely point at our meaning. Language is a game we play with each other which does not and cannot communicate ultimate meaning. All we can do is agree or disagree to play games - animals dancing around a fire.
This is my main beef with "inflation" being used differently now from what it had been historically. Going back to the roman empire it was always about money supply increase, Keynes and crew decided that didn't sit well with them since money supply manipulation was their whole game.
You're just parroting the same thing again and again without providing any evidence. For a start, the amount of money in circulation is an unobservable quantity. It's extremely unlikely that the Romans had a word for it.
In antiquity[0], debased coinage would be equivalent to inflated currency today.
Each time the Romans debased their currency, they could be fairly confident that previous more valuable issues had a tendency to be hoarded if possible from that point on, and with a precise measure of the exact amount leaving the treasury could get a reasonably good estimate of how much was actually needed to be in general circulation. Perhaps the minimal amount to get by, perhaps not, maybe just depending on how generous Caesar felt at the time. And by offering a slightly more-than-fair exchange for the silver content, when issued, the amount that can afford to be hoarded can be deduced. While still turning a little bit of a "profit" from fractional percentages of silver that the general public can not measure accurately. Their central bankers were as shrewd as any existing today, equally as gifted mathematically as modern man can be.
Further inference can also be made about the resulting state of affairs by later following the private trading of recalled issues at "inflated" (previous) values.
If you were the one setting monetary policy risky enough that the chance for collapse was not as slim as it could be, you would want to know how close you were cutting it and the best way would probably be to get as good a handle on the money supply as you could, even if you could not gain full control. Nobody can anyway. But all effort always will be toward gaining more control.
This is basically the variable you could call _value of money_.
Not exactly the same as _price of money_, which is manipulable somewhat differently, but directly related to it in terms of _prices of goods_.
Which seems to be directly related to any type of inflation you can imagine :\
No telling if the ancients acted on the information that was available if they wanted to, this is just one of the ways to do it that is not in conflict with their habit of gradual debasement of their coinage as reissues took place over the years.
Its used in many ways, that doesn't redefine the word though. Inflation is a policy of increasing the money supply, nothing more and nothing less.
Inflation is not price increases. If that is the definition then the metric is effectively useless. Prices can increase for any number of reasons, looking only at price changes doesn't tell us anything meaningful or actionable.
“Inflation” doesn’t mean anything by itself. It is a shorthand for either price inflation or monetary inflation. Or inflating a balloon. Context is needed.
It absolutely does when the correct definition is still used. Inflation is an increase in money supply, that's really all there is to it.
Your point is why the use of "inflation" to mean price increases is so meaningless. Prices change for any number of reasons and you need context. When "inflation" still means in increase in the money supply there is no context required to know what it means, though obviously that's not all the information you need to understand the economy.
You are wrong and that's why you are misunderstood.
I would suggest just saying "increase in money supply" if you mean increase of money supply instead of using a term that means "a continuing rise in the general price level". That will make people understand what you mean.
It's not just "used in many ways," it has several definitions. The one that almost everybody uses -- including the Fed[0], US Dept of Labor[1], and the ECB[2] -- is about rise in prices. Nobody is saying that your definition is bad or wrong, but to claim that it's the only (or even primary) one is disingenuous.
Sure, though it makes sense that most economists use the price inflation term. The change in how "inflation" was being used largely goes back to Keynes and Modern Monetary Theory. Most economists today fall into that bucket, of course they use the term in the same way.
That doesn't change the fact that the attempt to redefine it both co-opted the word and made it functionally useless. Prices change for all kinds of reasons. The amount of change alone is meaningless and using that meaning of the word allows economists today to play a lot of shell games with the numbers.
> change in how "inflation" was being used largely goes back to Keynes and Modern Monetary Theory
This is totally false. It dates to the inter-War period, specifically, to describe Weimar hyperinflation. (If you just look at money supply, it was bad. If you look at prices it was the disaster that it was.)
No, that is expansion of the monetary base. Inflation is an increase in price levels. If a country’s money supply contracts while prices rise that’s inflation.
The problem with the metallic definition is a country that loses half its territory and most of its reserves after losing a 19th-century war, thereby setting off double-digit price increases across its economy, doesn’t “inflate” from a monetary base perspective. Once we understood these concepts were separate, we segregated the terms. Insisting inflation refers exclusively to monetary-base expansion is phlogiston-theory stuff.
The problem with the metallic definition, meaning the definition of "inflation" from the roman empire until the mid 1900s, is that it didn't really work well with Keynesian economics or modern monetary theory.
Inflation has a bad connotation historically due to the number of examples where increasing the money supply too quickly ruined economies and destroyed empires. MMT and Keynesian economics use the money supply as the primary tool for controlling the economy.
They may not like that "inflation" described the exact mechanism for the main tool of modern economics, but that doesn't make it wrong. The easily could have come up with a new term for an increase in the price of goods rather than co-opting an existing term. That strategy seems very much like a play driven by ulterior motives.
It isn't so much that we had to understand new concepts as it was they had to redefine terms to put their new game in a better light. That's also why they talk about price increases rather than currency devaluation or theft. Both would be accurate, but price changes sound more benign.
> I'm sorry I just can’t find a single source backing you up.
As adastra22 points out: some authors define the term inflation primarily as the increase in the money supply (“monetary inflation”), others primarily as an increase in (consumer good) prices (“price inflation”).
At least in modern economic literature and usage, the term “inflation” (without modifier) is more often used to denote price inflation rather than monetary inflation.
The insistence that the term “inflation” ought be primarily rather used for “monetary inflation” goes back to at least Ludwig von Mises, The Theory of Money and Credit, 1912:
“In theoretical investigation there is only one meaning that can rationally be attached to the expression inflation: an increase in the quantity of money (in the broader sense of the term, so as to include fiduciary media as well), that is not offset by a corresponding increase in the need for money (again in the broader sense of the term), so that a fall in the objective exchange-value of money must occur.”
Thank you for confirming my hunch that this level of confident-incorrectness and mixed up history could only have come from some damn article on mises.org.
While it may be true that the Austrian school uses it like that, it's certainly not the case that they're the only ones. In fact, I suspect if you speak to anyone economically trained over a certain age, there would be a high chance of them defaulting to this.
Growing up, a close relation of mine was an economist, and certainly not of the Austrian school. As a teenager, I was basically ganged up on by a teacher and some kids when inflation was brought up in class. They seemingly had no concept of monetary inflation, and I was forced to swallow that it referred solely to prices going up. I obviously questioned him on this incident, and he outlined that the "prices are going up" phenomenon is price/consumer inflation, and that increases to the money supply are monetary inflation.
Historically, monetary inflation and consumer inflation coincided (Supply of X goes up -> X is devalued -> consumables are now charged at higher X), and so distinguishing between the two wasn't particularly pertinent.
The Roman Empire's observations that debasement of their coins resulted in the increase in prices, meant that the original conception of inflation really was as a monetary phenomenon, not just that prices are going up.
It's really only a relatively recent phenomenon, from the early 20th century, that you had dual definitions trying to occupy the same word, although the concept that price inflation could deviate from monetary inflation probably was starting to be understood with the establishment of price indices in the 19th century.
Keynes arguing that prices could rise independent of the monetary supply post-Great Depression increased the focus on consumer inflation. It was around the 1970s where inflation more commonly came to consumer inflation in academia. 'Stagflation' of the 1970s is probably the tipping point in usage.
To conclude: it's not really wrong to use inflation to refer to monetary inflation, as it's the original usage, but considering consumer inflation as 'inflation' is definitely more in fashion (especially in the US).
This doesn't support your assertion- in fact it does the opposite. The definition(s) of inflation has changed over time. That does not make the current definition(s) less correct
Well I did try to caveat it that its one of the few sources I could even find that reference the fact that the definition was changed.
My argument isn't with the fact that "inflation" is in fact being used to mean "price increase of goods." My issue is that economists co-opted the word at all and made it functionally useless, especially in isolation as it is often mentioned with no other context of why prices changed.
The use of "inflation" to mean money supply increase goes all the way back to the roman empire.
Have you ever read up on that list of predefined goods? It is pretty interesting to see how regularly the list is changed and how many different factors they add in to adjust prices.
Someone did a study looking at magazine prices for example. They picked magazines because they almost always had prices printed on the cover and cover images are cataloged. I don't remember the exact numbers, but they found that the actual prices went up by a much higher rate than how the CPI calculated it because they were discounting price increase with a claim that quality got better. Meaning you may have seen the price double over time but the CPI only said it went up by 30% because you got more value from the newer issues.
> Inflation is actually the increase in the money supply. The term is used wrong almost everywhere today.
Do you have a source that this is the „correct“ definition? Wikipedia for example uses the definition you think is wrong, and specifically says that CPI measures inflation.
You can see glimmers of the original definition on the wikipedia page, but the term has been misused for decades noe and basically anything you try to find for a definition of inflation will talk only about prices.
I can't get deep links in wikipedia on my mobile browser for some reason, but here's the full page.
The "Terminology" section vaguely references the original Latin word and gives a few nods to when currency was tied to gold. It is a bit hand wavy, though when it talks about new gold supplies being found or later mentions when the cost of money changes, those are both related to the original (correct) definition. Finding more gold increased the money supply, which may change prices though it doesn't have to.
Toman history sometimes covers the idea well as they inflated the currency by minting more coins to increase supply. I can't find a great link at the moment that covers it well from that angle though, I'll try to come back here when I'm at my desk if I find a good link down that rabbit hole.
If a word has been "misused for decades", its definition has changed.
It's a fool's errand to try to claim the original definition is the "right" or "only" definition at that point.
You've lost this semantic battle against the world, and it's honestly pretty exhausting to see you wasting effort trying to continue fighting a lost cause.
Sure, we could always make a different term for monetary inflation and avoid the ambiguity with the new definition but that doesn't fix the underlying point.
Monetary inflation is an important concept that is now almost entirely ignored. An increase in the cost of goods can be interesting, but its a second or third order effect of an extremely complicated system.
Price changes are meaningless without context and extremely difficult to understand with context. Money debasement, or inflation, is easy to understand and is a primary input to the system rather than a downstream effect.
Wait, is your argument that modern economists couldn't possible be wrong? Or in this case, that modern economists couldn't possibly have co-opted the term to better work with Keynesian economics and MMT?
If physicists decide to reuse the word "meter" for a unit of measuring volume does that mean anyone that uses it as a measure of distance is wrong? Wouldn't it make more sense to create a new term for the new need, a term that doesn't collide with centuries of use?
>If physicists decide to reuse the word "meter" for a unit of measuring volume does that mean anyone that uses it as a measure of distance is wrong? Wouldn't it make more sense to create a new term for the new need, a term that doesn't collide with centuries of use?
Perfect question!
In fact, the definition of "meter" has changed over time, and if you stick with the old definition, you'd be off by 0.2 millimeters:
Science changes as it needs to. (And the word "science" is doing a lot of heavy lifting here when we are discussing economics, aka the dismal science.)
A 0.2mm difference is so vastly different from the analogy he made to using it as a measurement of volume. Hopefully you're putting this forward as an interesting factoid and did not mean it as an actual argument.
Inflation historically was a measure of the change in money supply. They co-opted the same word to instead measure an entirely different concept, the change over time of a basket of goods.
In my book that's very similar to taking a distance measurement and reusing the word to instead measure a totally different concept, volume. Curious how its different though, I may just be tripping myself up here.
Classical economists didn't seem to use the term 'inflation' in either sense. I can't find any evidence that 'modern economists' have corrupted the original meaning, like you imply.
The author certainly makes this claim, but fails to provide any evidence.
"It is during this period [the era between the mid-1830s and the
Civil War] that the word inflation begins to emerge in the literature, not in reference to something that happens to prices, but as something that happens to a paper currency.7"
Could they be wrong about the well-understood label they’ve agreed upon to refer to a particular concept in their field? No, and in fact I’m tempted to class the answer as tautologically “no”.
Growing up, a close relation of mine was an economist, and certainly not of the Austrian school. As a teenager, I was basically ganged up on by a teacher and some kids when inflation was brought up in class. They seemingly had no concept of monetary inflation, and I was forced to swallow that it referred solely to prices going up. I obviously questioned him on this incident, and he outlined that the "prices are going up" phenomenon is price/consumer inflation, and that increases to the money supply are monetary inflation.
Historically, monetary inflation and consumer inflation coincided (Supply of X goes up -> X is devalued -> consumables are now charged at higher X), and so distinguishing between the two wasn't particularly pertinent.
The Roman Empire's observations that debasement of their coins resulted in the increase in prices, meant that the original conception of inflation really was as a monetary phenomenon, not just that prices are going up.
It's really only a relatively recent phenomenon, from the early 20th century, that you had dual definitions trying to occupy the same word, although the concept that price inflation could deviate from monetary inflation probably was starting to be understood with the establishment of price indices in the 19th century.
Keynes arguing that prices could rise independent of the monetary supply post-Great Depression increased the focus on consumer inflation. It was around the 1970s where inflation more commonly came to consumer inflation in academia. 'Stagflation' of the 1970s is probably the tipping point in usage.
To conclude: it's not really wrong to use inflation to refer to monetary inflation, as it's the original usage, but considering consumer inflation as 'inflation' is definitely more in fashion (especially in the US).
You've linked to a privately written article ("The views authors express in Economic Commentary are theirs and not necessarily those of the Federal Reserve Bank of Cleveland ") by someone who worked for the Cleveland Fed, who blames printing currency for inflation. No doubt that debasement of the currency increases the nominal prices of things. But it's hard to square the idea that that's all there is to inflation when you consider that lots of countries had inflation after COVID. They didn't all coordinate on printing currency.
I've never actually seen anyone use "inflation" to refer to cost of living. Most economists use the term to talk about price increases of a subset of goods, but that isn't directly measuring cost of living.
Most people are not economists. All they know is they're spending more for less every month, and they don't like it.
The money supply idea has always been Austerian crackpot nonsense, intended to dissuade governments from investing in public services of all kinds because that's socialism, and we certainly don't want any of that.
In reality price rises are mostly driven by corporate profiteering, and sometimes - as in the oil crises of the 70s - by supply shocks.
This isn't entirely accurate, either. An increase in the cost of living occurs when real wages fall (in other words, when workers paid less, in real terms (adjusted for inflation), for the same amount of work). In principle, inflation doesn't necessarily lead to an increase in the cost of living, although in practice usually it does.
There are many faces of inflation.
The "money supply" you are talking about was not the primary driver in the last few years and there was robust demand for the treasury issuance. You will see the money supply inflation pick up when treasury auctions start to fail. I believe this will happen down the road but not soon.
Most of the inflation was driven by other factors: low-income labor shortage, and a supply side shortage that fueled an increase of prices for commodities and anything else up the chain.
> The "money supply" you are talking about was not the primary driver in the last few years and there was robust demand for the treasury issuance.
Unless I'm mistaken, I don't believe we can be sure of that. The economy is extremely complex, ferreting out the impact of any one intervention is nearly impossible.
On the surface it seems very unlikely to me that printing trillions in new money and giving it to banks, businesses, and directly to every citizen had no impact on prices. The supply of money increased dramatically and the cost of money (interest rates) was also extremely low.
Beyond my hunch though, I haven't found any data that has clearly isolated the inflation out of the equation to be able to show that the price increases weren't driven by the new money at all.
The Fed is really not printing anything, and they have a lot of power to control money supply through open market operations. It is incredibly efficient when doing this, and can increase the cost of capital very quickly. But like you said, it is hard to come to a definite conclusion or come up with a proof.
The other parts of the equation that I mentioned are very hard for anyone to control.
https://www.axios.com/2024/05/26/inflation-definition-evolut... (There is some argument that I may too be wrong, and inflation is coming to mean high prices, but when the DNC campaign was talking about low inflation, it was not referring to prices, but change in prices.)
My point wasn't that the term is used this way, its that the definition of inflation has always been an increase in money supply. The common use of the term to mean a change in prices is a useless definition.
Its extremely common to hear "inflation" used to describe price changes, but the number is then used in isolation. Prices change for countless reasons and without detailed context related to supply/demand, strength of the dollar, etc you have NP idea why prices changed. Maybe we printed trillions and prices went up because the supply of money went up
Maybe prices increased because demand is outpacing supply. The response to those situations and economic sentiment should be wildly different, but the inflation number may be exactly the same.
It's pretty cheeky, random internet guy, to tell multiple central banks--whose function can be placed squarely in the realm of economics--that they are wrong about what inflation is.
This Hacker News, people on here think they have a much better understanding than the experts about everything.
And that would even include something like "As a poor, single mother working 2 jobs in Pennsylvania, how is my life better under the current administration?"
"You probably rely on medicaid or medicare or the AHCA for health coverage. The first two are going to get slashed and the third is going to get shit-canned. Oh, and if you have a pre-existing condition, that's going to come under consideration again. Price controls are going away for medications you or your kids might rely on. There will be no raise in minimum wage and with tariffs coming, you might as well get a third job."
That would be my response, based on the past actions of republicans under Trump.
I didn't realize I was talking to central banks here, that's good to know.
I believe your argument, though, is that those in power can redefine existing words to whatever best suits their current needs and we should all accept that and not consider why we had the original definition in the first place?
> its that the definition of inflation has always been an increase in money supply
Can you provide a single source for this?
I'm looking at textbooks from 25 years ago (Macroeconomics by Doepke Lehnert Sellgren) and they also contradict you. How far back are we supposed to look for your definition?
Heres a good source I just found as so many were looking for sources here.
I believe it was around the 1960s or 1970s when most economists started using "inflation" to mean price increases.
The history there is pretty fascinating, it was basically a reaction by modern monetary theorists who really had to redefine it for their economic system to make sense. A core goal in MMT is to have a fiat currency and controls in place to let you manipulate the money supply quickly in an attempt to move the economy in one direction or another. With the original definition, inflation is actually the tool used by MMT rather than an indicator of economic health.
That history also pretty clearly explains the shift. The argument pretty quickly shifted to being based on the effects. Debtors favored currency supply inflation because it increased prices and thus decreased. Lenders favored the opposite.
Since most of the people arguing about the term care about a specific class of effect, the term grew to encompass that type of effect. As our understanding of the cause of that effect grew, the term shifted to primarily meaning the effect.
This all makes complete sense since most people don't care about the cause in itself but about how prices are changing.
> This all makes complete sense since most people don't care about the cause in itself but about how prices are changing.
I would hope that isn't true, an economy would function horribly if we only cared about the price change percentage and didn't care why it happened. If prices went up because most people had more money to spend you should act much differently than if prices went up because supply collapsed, for example.
> I would hope that isn't true, an economy would function horribly if we only cared about the price change percentage and didn't care why it happened.
That isn't what I said.
The causes of inflation to matter, but we generally only care about them because they cause inflation. We don't tend to care nearly as much about the causes in and of themselves.
Thus as the argument about how much inflation there should be progressed, it is perfectly natural that the term came to refer to the part of the debate we actually care (how fast prices rise) about rather than factor that can sometimes cause it.
I'm not sure I understand this thought, it's possible producing larger quantities would actually increase the velocity of money which would increase money supply
Velocity of money itself is a funny term in modern economics. Modern monetary theory, or at least the economists that follow it, argue that the velocity of money doesn't mean anything and they basically ignore it.
Arguably, with a fiat currency where they can freely manipulate the money supply, they aren't wrong. That's a problem of fist in my opinion though, there are too many moving pieces and the data can be too easily manipulated to say whatever you want it to say.
In my mind part of the calculus in a high interest rate environments has to include the reduced movement in investments and into more stationary savings, maybe it's accounted for indirectly?
> It is the cost of the goods. What people will pay.
No. Even in the modern definition I'm arguing against here, this isn't right. The cost of goods is just a number, inflation in the CPI sense would be the rate of change of prices.
> Inflation Contributors:
30% money supply
30% was corporations raised prices specifically under cover of people blaming the government. This was actually listed on earnings calls, for profit.
30% supply chain shortages.
Where's the last 10%? And how do you come up with such specific numbers? Economies are extremely complex, I don't believe you could have untangled them so precisely or that the numbers behind it would be so evenly distributed.
You said Inflation was Money Supply, I said it was the cost of what you are buying. YES, technically it is the "change" in the cost of what you are buying. Congratulations. I assumed that was understood.
Percentages.
Nothing is exact. There are ranges, and really more than 3 factors. I was going off memory.
Congratulations again on your discernment.
More ball park:
""
While pinpointing exact percentages for each contributing factor to inflation is complex and can vary significantly depending on the economic context, a breakdown of major contributors could include: high demand for goods and services (30-40%), supply chain disruptions (20-30%), labor cost increases (15-25%), rising energy prices (10-15%), government spending (5-10%), and currency devaluation (5-10%); however, these percentages should be interpreted as a general guide and not a definitive breakdown"
The point is, it is not Biden's spending, that is just another misleading right wing talking point. (lie)
> Inflation is actually the increase in the money supply
It's not that simple. That might be how it is defined in economy textbook, but in practice, how do government agencies measure inflation? You have predefined basket of consumer goods and record their prices over time, and that price increase is reported as "inflation rate", and that's what gets reported in TV news.
And yet you somehow blame people for misunderstanding the term when the wrong definition is hammered into their brains all the time by all the mainstream media.
That's the clue that it's a signal. If every merchant is mandated to drop the cost of goods to 1$, the measure becomes meaningless for this purpose, while people continue to trade more and more for the same amount of goods. The published values themselves are incidental and barter normalizes, detached from the edge effects, as the underlying cause remains.
Inflation is actually the increase in the money supply. The term is used wrong almost everywhere today.
Price indexes like the CPI are what measure the change in prices of a set of goods.
Inflation can influence prices since the supply of money changed, but they aren't directly linked.
Edit: getting plenty of requests for a source here, especially because you will find countless sources online using the price increase definition.
https://www.clevelandfed.org/publications/economic-commentar...