"What's this? The American working class is struggling because wages haven't kept pace with cost of living in 50 years? Surely suppressing wages even more will fix that!"
Personally, I think this slow moving inflation disaster is the result of the US government's inability to raise taxes. They have to reduce the money supply somehow to fight inflation and they're doing it with one hand (fiscal policy) tied behind their back. I suspect the reason is because tax increases are politically toxic while monetary policy changes made by the Fed are seen as apolitical. To be even more cynical about it, one could argue that the wealthy people and corporations who control politicians have an obvious interest in preventing tax increases even when it would benefit the economy as a whole in the long term.
> Personally, I think this slow moving inflation disaster is the result of the US government's inability to raise taxes
I'd argue the opposite. We print absolutely insane amounts of money, which is an indirect tax via inflation (and a regressive one at that, since the rich own more inflation-resistant asset classes than the poor, who don't really own any assets). Higher taxes and less money printing would make that hidden tax less hidden, which is good, but the core problem is spending/printing too much, not taxing insufficiently.
Tax policy also acts much more slowly for individuals. Beyond that, I don’t think this is US-specific issue. Are there any countries at the moment trying to address near-term inflation via fiscal policy?
