By Jim

Muchlinski

Inflation is something that’s sure to affect everyone, regardless of age, occupation, or place of residence.

Prices have soared for many essentials; including gas, food, housing and many retail items. They’re all outpacing household income.

One of the most difficult factors, particularly for people whose incomes are fixed, is that interest rates are not increasing much as a response.

In the 1970s my grandparents had certificate of deposit investments that paid about 15 percent. It went a long way as far as keeping up with inflation. They were able to preserve financial capital in retirement.

Now CDs pay next to nothing in interest. The stock market, where most 21st century people have to invest retirement earnings, is even worse in 2022. Losses are occurring even with conservative portfolios.

We’ve had about 30 years of bad federal economic policy. Federal money managers have repeatedly depressed interest rates to encourage borrowing.

People who believe in saving are penalized. Wasteful spenders are rewarded. They’re allowed to accumulate possessions even though they own practically nothing free and clear.

It’s fueled a strong demand for real estate, something that sooner or later is going to face limits. Again it’s all based on borrowing. Many of the people who buy expensive houses don’t intend to ever pay off their mortgages.

These people aren’t real homeowners. They’ll never realize the huge advantages that extist after a mortgage gets paid in full.

It seems that only the wealthiest one percent are truly in better financial shape than their counterparts were back in the 20th century. The gap in wealth has been allowed to grow because of a conservative, do-nothing political climate.

I doubt if society is ready for radical change, the kind of thing that would guarantee affordability when it comes to life’s essentials.

The possibilities could include gas rationing, expansion of food shelves and food cooperatives, a federally mandated rent freeze, and price ceilings on home based Internet services.

There could be a federal savings program to guarantee 10 percent interest for holdings up to a maximum amount, maybe at least $50,000. It could be financed with higher taxes on corporations, wealthy investors and people with high incomes.

I don’t think society is ready for any of that. Conservatives would call it extreme socialism and a redistribution of wealth.

The public should demand that they come up with their own set of alternatives. Continuing along the same path will only make almost everyone weighed down by debts because of the high cost of education, cars, housing, and living expenses.

Eventually that could leave nearly everybody well short of a comfortable retirement. They’d depend on human services in their elderly years.

The American Dream should stay alive for future generations. Every spring we graduate talented young people, ready and able to go out into the world and professionally replace those who retire. These young people deserve a fair shake.

For now individuals can find some small ways to economize. We can opt for shorter and less costly travel plans. We can stop buying non-essential food items if the price goes beyond a certain point.

In the future there’s likely to be a need for broader changes in the way people spend money. Society won’t be able to spend its way out of debt and economic difficulty. Sooner or later we’ll have to save.

— Jim Muchlinski is a longtime reporter and contributor to the Marshall Independent