The thought behind my tag line came up when the first stimulus happened. I was already expecting serious inflation, but the government response to the government shutdown clearly pointed to huge - if not hyper- - inflation beginning in 2021.
And here we are...
Fact is, the minimum wage is the “floor” too the cost of living. When you raise the floor, you raise it all. The only ones to benefit are those that get a temporary benefit when they don’t lose their jobs and their income goes up before the general economy catches up. And then we are right back where we started.
And the federal government needs price inflation to monetize the debt.
Meanwhile, state and local governments need taxes. Taxes are generated from people buying and selling, producing and consuming. When the lockdowns reduced or eliminated that, well, let’s just say that states and municipalities are in a world of hurt. We’re just not hearing much about it. They are like mom and dad trying to do the monthly bills a year after they got laid off, and we’re the kids that they keep re-assuring that everything is fine - except they just got an eviction notice.
Buckle up.
Have you bought lumber or built a house in the last 6 months? The plywood I paid $26 a sheet for in December of 2019 is $46 a sheet now. Housing is generally up by 10%. How about that for inflation?
Yup, all boats rise on the tide. It is only a short term benefit for some and a long term disruption for all.
Sales tax collections in all counties in my area are up quite a lot from the same time last year but you’re right about other taxes. The state is looking for all they can find and turning people over to shake the money out of their pockets. The latest is a threatening letter and canvas for personal property taxes which includes anything that isn’t dirt or attached to it in their mind.
Buckle up.