Everybody is talking about inflation during this election year. I fear that most folks who've not taken an economics class misunderstand the concept of "inflation."
When used to describe the economy, the term "inflation" means the rate at which prices are going up. It is also the rate at which your dollars are losing value.
When a politician brags the rate of inflation is down, all he is saying is that prices are rising more slowly than before. Your dollars are losing value more slowly too. Prices are not going down, only the value of your dollars is doing that.
The only way most prices go down is something called "deflation" which nobody much talks about and economists tell us we want to avoid. Deflation only happens when the economy is terrible. We're talking double digit unemployment rates, bread lines, maybe food riots, either an actual depression or darned close to one.
You'd think 0% inflation would be ideal but it normally comes with a weak economy and uncomfortably high unemployment. Economists mostly agree that about 2% inflation is ideal in terms of tradeoffs - the good of economic activity outweighing the bad of decreasing money value.
2% is the target the Fed aims at, but doesn't always achieve, particularly when government is spending more than usual, as it has for the past 3 years.
Kamala Harris has just released her proposed economic plan, involving large amounts of new government spending and handouts. The effect of doing what she proposes will be rapid inflation = fast prices rises, and rapidly weakening dollars.
If she then responds by fixing prices, at levels at or below the cost of production, less will be produced and shortages will occur. This has been tried repeatedly and has never worked.
