Deficit spending. In the “old days” when the government wanted to spend more money than it collected in taxes, it sold treasury bonds to raise the money. Now they literally just create the digits on a computer and spend it on everything from rockets to welfare. With a $38 trillion debt, abut half of which is from made-up money, I’m surprised it has taken this long for inflation to kick in.
And money doesn’t go away when you spend it, the company you spent it on pays their workers and staff and it gets spent again. Who in turn spend it on gas for their car and clothes and so on.
Now, as the others said, we have more money chasing the same goods.
“it sold treasury bonds to raise the money. Now they literally just create the digits on a computer “
That’s silly. Whether the bond gets printed on a piece of paper or it is just a digital copy, makes no difference. Those bonds still have to be sold at a Treasury auction. Does any one who buys stocks today actually request the paper stock certificates? 99.99999% don’t.