Rest easy: inflation is low and steady

(Image credit: U.S. Department of Labor)

last updated 8 January 2015

Tim Cavanaugh has a post over at the National Review complaining that people are talking about how unaffordable the American Dream is these days, without mentioning inflation:

...at no point did anybody refer to the monetary phenomenon by which the Federal Reserve Bank of the United States incessantly expands the supply of money, and as a direct result you end up paying more for less of everything until the day you die — and beyond. [National Review]

Now, to be fair, later in the piece Cavanaugh suggests the CPI is a government conspiracy (a la Shadowstats, where they take the CPI and tack on a few points) and that "true" prices must be skyrocketing. The major problem with this is that growth itself has been fairly slow, so much inflation at all would mean that the United States economy has been shrinking, as increased prices overwhelm the value of increased nominal output. How would Cavanaugh square six years of job growth during a postulated secret recession with Okun's law? Or are the jobs numbers also faked?

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I think it's safe to conclude that we can breathe easy; the United States is not going to turn into Zimbabwe.

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Ryan Cooper is a national correspondent at TheWeek.com. His work has appeared in the Washington Monthly, The New Republic, and the Washington Post.