Gas prices rose as high as $4.19 in Chandler on 7 March 2022, a record, draining family budgets. Expect more of the same.
After a long period of calm, inflation is now rampant, nowhere more so than in the United States. A combination of unusually reckless spending and the throttling of supply via lockdowns has produced a highly inflationary environment causing rapidly rising prices for food, gas, housing, building supplies, cars and most everything else.
On 7 March 2022, gas prices in Chandler reached a record high of up to $4.19 for a gallon of regular gas. As gas prices follow the price of oil with a small lag, we can expect prices to go higher still. The Biden administration is attempting to blame this on the Russia-Ukraine war, hoping that people have gold-fish like memories and have forgotten that inflation has already ravaged the United States for the past year.
Inflation can be brought under control by removing hurdles to supply, such as regulations that hinder the exploration, production and transport of oil and gas. The Biden administration however is doing he exact opposite, fighting the energy industry at every turn and causing international crisis that throttle supply overseas. This is relevant because oil is a global commodity.
A second way to bring rampant inflation under control is to raise interest rates. This will entice more saving and hence less spending, reducing short term demand. However, with the federal government having borrowed record amounts of money, a large part of which during the last 3 administrations, the hands of the Federal Reserve are somewhat tied. Larger interest rates increase the cost of debt servicing and can bring a country into bankruptcy if most or all of a country's budget has to be spent to service debt, rather than to provide government services.
The old saying continues to hold true: There is no free lunch. The recklessness of the US federal government is causing inflation which robs people of their savings. This is how they are forced to pay for the massive spending that our politicians continue to engage in. Wealth is created by work that makes goods or provides services, not by politicians grand standing while spending and wasting the money that others have earned.