Government spending raises inflationary concerns 'of a kind that we have not seen in a generation'

Government spending raises inflationary concerns 'of a kind that we have not seen in a generation'

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Gas prices are among the rising costs consumers are facing as the U.S. continues to reopen following the pandemic. | Flickr

Despite COVID-19 restrictions being eased in many regions across the nation, voters in Georgia, as well as in other swing states, are still concerned with the current state of the economy and the risk of inflation. 

A recent report by Axios found that only three in 13 voters believe the U.S. economy is “booming,” with the other 10 worried that the economy will suffer as a result of large government spending on the federal stimulus. In contrast, 11 out of 13 voters found it believable that people are not currently looking for jobs because they are making more money from unemployment benefits. 

Another report by the Congressional Budget Office projected that if the U.S. continues its current rates of spending and taxing, the country’s debt will reach 107% of the gross domestic product (GDP) by 2031.  

Former Clinton administration Treasury Secretary Lawrence Summers echoed similar concerns about this inflation, stating that the recent stimulus packages “will set off inflationary pressures of a kind that we have not seen in a generation.” 

Rising prices for goods have already begun as life begins to reopen from restrictions. With more drivers, the price of gasoline has risen 56% in recent months. Other goods that have grown more expensive are bacon (+13%), whole milk (+7.2%), and alcohol (+1.8-3.7%).  

According to Sen. Rick Scott’s (R-Florida) office, inflation could rise from pre-COVID levels of 1.4% to around 2.3% or higher.  

Concerns for inflation and its effects are already influencing American spending habits. A Shopkick survey found that 83% of respondents are adopting stricter budgets, and 54% are “very worried” about inflation.

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