One of the most disturbing realities unfolding in our society at this very moment is rapidly rising inflation. Many are saying that there are much more important issues for us to focus on. They are wrong. Inflation is not just an economic issue. It isn’t about the price of gas at the pump, though the media dumbs it down to that single data point (and dumbs us down in the process).
Inflation kills democracy. It is not an economic issue.
Inflation was the primary factor in the decline and collapse of the Roman Empire. They decreased the silver content in their coins from 100% to 5% in order to repay debt. At the same time, they were increasing their non-productive debt. Non-productive debt is that which doesn’t add to the productive assets of a nation (or a person).
What is non-productive debt? In the case of a nation this would include financing war or unsustainable public spending. In the case of an individual this would include credit card debt. These types of debt are non-productive because they are not deployed in ways that add value to the economy and produce income to pay the interest on the debt.
The combination of non-productive debt and devaluing their currency by reducing the silver content ravaged the Roman Empire by creating inflation that saw prices rise 1000%.
The Great German Inflation between 1919-1923 played a significant role in the death of German democracy and the rise of Hitler and the Nazis. The cost of a loaf of bread rose 80,000%. Hitler’s central promise in his early days was simply “bread and jobs.” And we know what happened next.
Less than 15 years ago, Zimbabwe set staggering inflation records with percentages in the billions month-to-month in 2008.
Inflation is now a problem in the United States. This is an absolute statement of fact. Anyone who says otherwise is lying to you.
It has been a problem for many months, but the Federal Reserve only took action on it this month.
This is the analogy to keep in mind. We are chasing a train, travelling at 110mph that left the station 9 months ago. To catch that train and bring it under control is going to take some chasing.
Economic policy has been politicized and is now potentially being weaponized like never before.
Inflation isn’t the government’s problem. It isn’t the Federal Reserve’s problem. It is everyone’s problem. If you want to do a deep dive into one socio-political-historical issue this year, let it be inflation. The more people who know something about this topic in our culture at this time the more chance we have of combatting it.
And when you see news reports on inflation, don’t think about the price of gas at the pump, remember inflation kills democracy.
Matthew Kelly
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