Inflation, increase in prices or declining value of dollar?

 ANNUAL INFLATION IS COMPOUNDED LOSS OF BUYING POWER

WHY YOU PAY MORE?

We are all taking notice that prices are increasing by ever increasing amounts. Items that we purchase regularly are the ones we notice most. It seems grocery's are higher every couple of weeks. So it may be interesting to keep in mind that government does not account for rises in food or energy. The government claims those prices are too volatile to allow an accurate accounting. Why they do not include the prices of the most important and the most used items by all of the population? Everyone uses food and energy, they are essential, they should be the most closely tracked for a real index of inflation. They only take into consideration prices in Urban populations, yet a large percentage of the population do not live in urban centers. 

Government  inflation numbers are as follows:

2023    3.4%

2022    8.  %

2021    4.7%

2020    1.23%

2019    1.81%

2018    2.44%

2017    2.13%

Even when the government reaches the rate of 2% which it considers optimal your saving and fixed investments are losing value. We not only have the increase of this year but that is calculated on the increased prices from the year before.

Example 100 in 2020 in 2021 x.4.7% is 104.70

                      104.70  in 2022 x 8%     is 113.08   

                      113.08  in 2023 x 3.4%  is 116.92   

Again this does not include food and energy.

Private sector wages have not kept up with inflation, only government workers have maintained their buying power.   Remember the government workers are paid for by private sector workers. Government workers do not produce wealth, they are an expense on the national ledger.  

Deficit spending by the federal government, decreases the buying power of the currency and contributes to inflation.

In 2023 Federal spending was $6.3 Trillion. 24.2 % of the Gross dom product.                     Federal receipts was    $4.8 Trillion for a deficit of $1.5 trillion which was financed by borrowing.

Add State and local spending and it accounts for near 40% of the GDP.

With 4 out of 10 dollars of the nations spending being made by government, it increasingly leaves less for the private sector.

This pattern of ever increasing deficits has been going on for years, no matter which party is in power. This policy can only increase inflation or reduced buying power unless the country takes action and accepts that painful consequences will be the result either by planned action or by circumstances beyond the nations control.