Nebraska families feeling the pinch of high inflation

A Nebraska economist breaks down the reasons this inflation is happening and advice for consumers.

February 21, 2022 9:29 pm – by Megan Conway – for Chan 8 KLKN TV

My cmnt: This is an OK article on inflation. Conway interviews Ernie Goss who is a reliable, liberal democrat. He notes three reasons for our BidenFlation which are all valid but fails to mention three more reasons of a greater cause-effect connection.

My cmnt: First, we have blue states continuing the drag on the economy with their stupid and draconian Covid measures. Second, we have Biden closing down our energy sources (i.e., natural gas and oil) that President Trump had opened up. When you cause gas prices to rise by limiting supply absolutely everything else must go up as transportation costs go up. Third, because of democrats scaring the crap out of ignorant young people with lies about Covid these same kids will now not work the entry level jobs (i.e., restaurant help, etc.) needed to run our economy because they are worried about contracting and dying from Covid-19.

My cmnt: The greatest economy in my lifetime (President Trump’s) did not happen nor disappear by accident. Democrats shut down the country and caused this disaster.

LINCOLN, Neb. (KLKN-TV) – Buying in bulk, couponing and garage sales.

Those are some of the ways Lincoln mom Amber Powell is making her family’s dollars stretch as much as possible.

“So, we try to do a lot of activities that are always free in general. But yeah, we’re not right now affording to do any kind of extra activities right now,” Powell said.

Her family rarely goes out to eat, cuts out unnecessary things around the home and drives as little as possible. Powell said this is the worst year she’s seen in a long time with prices going up.

“Just everyday items, I can’t believe how much they are skyrocketing,” she said.

The soaring inflation is the highest we’ve seen since 1982. The latest Consumer Price Index released in February shows that consumer prices jumped 7.5 percent over the last year, with food prices increasing 7 percent and energy prices 27 percent.

Creighton University economist Ernie Goss said the Federal Reserve should’ve taken action by now by raising short-term interest rates.

“The Fed is behind the eight ball, as we say, are behind the curve. In other words, they should have already been taking action; they have not. And they’re getting, they’re letting inflation run a bit, in my judgment, to excessive inflation, because of their failure to act,” he said.

So what’s causing this inflation? Goss attributes it to three areas: spending, supply and demand, and labor shortages.

First, spending was increased with the stimulus packages given out during the pandemic and the infrastructure bill that is still being implemented.

Also, “The Federal Reserve has increased the money supply by 35 to 40 percent, since the beginning of the pandemic, 35 to 40 percent,” Goss said.

Second, supply and demand. Transportation bottlenecks across the nation and world are having a big impact.

“And that’s, of course, meant fewer and fewer goods coming to the shelves, and you’ve got buyers out there competing for those limited goods, driving up the price,” Goss said.

Third, labor supply shortages. In Nebraska, we have the lowest unemployment rate ever recorded, at 1.9%, which means businesses are competing for these limited workers, and that’s pushing up their costs. Then, those businesses are passing along some of those costs to the consumer.

Goss said the positive note right now is that we’re not in a recession — yet.

“And what the scary part, the real scary part, is we could get what’s called stagflation. That would be rising, inflationary pressures, at the same time the economy is in negative growth. In other words, we’re in a recession. We’re not there right now.”

So what advice does he have for the average person?

“One thing is certainly you can buy, for example, I bonds, those are sold by the U.S. Treasury, and they are protected against inflation right now they’re paying 7.2% interest on an I bond,” Goss said.

He also said if you need to borrow money, do it now and don’t wait. Also, it’s important to get a fixed interest rate on any agreement. If you can, delay buying a car, as that’s an industry that has seen a sharp rise in prices.

Powell and her family are focusing on their needs, instead of wants.

“And, you know, any kind of extra wants that we are wanting right now, we’re putting it on the back burner. There’s a lot of ‘wants’ things around my house that I might not be able to do this year because of the rising cost. You know, I might have to just count those out completely and just put it off for a few years if I can,” she said.

The Federal Reserve is set to meet March 15-16, which is when Goss expects it to raise short-term interest rates by 1.5 percent 1.75 percent. He said if the situation continues to worsen, the Fed could have a conference call sooner to raise rates, but that’s very unusual.

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