How Can WE Help Curb Inflation?

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Can the American people themselves help to curb inflation? We know the administration is not doing all of the "necessary" things to do it. So, what role can we play individually? Of course we can't do it alone. But one thing we know about inflation is that there only one way to end it. A recession. And while recessions are always painful, it is what is necessary to slow the economy down and reduce demand which in turn drives prices down. Raising interest rates does the same thing. It makes money more expensive and slows borrowing, which slows spending. I expect that the Fed will raise rates by at least another 75 basis points in the next round. I think it should be more. But that's better than nothing. So, what's our role? To force our own slowdown. One by one, individually. If we all pull back our spending on everything, especially our discretionary spending, it will slow things down. Granted, as prices continue to rise and wages have more difficulty keeping up, people will do this naturally. But we can do it ourselves too. Even in the smallest of ways. One less trip using a little less gas. Turning our thermostats up one or two degrees. Buying just a little bit less every time we go to the grocery store. One less meal out. Curbing inflation is really just about spending less and creating less demand for everything. It kind of goes hand in hand with a recent post where I mentioned Rush Limbaugh saying that we should create our own economy. Believe it or not, we have more influence than we think individually to affect things. And that goes for the economy as well. If we do it collectively, it DOES have an impact. When inflation is high, spending really only does one thing. It fans the flames. If we want to stoke the flames we have to close our wallets and make a few sacrifices in the short term. It won't solve the problem. That requires policy from our elected officials and the people who manage our money supply. But it can help, especially when those in charge aren't doing much to fix it. As John F. Kennedy once said, "Ask not what your country can do for you. Ask what YOU can do for your country."