The cost of consumer goods rose 4.2 percent during the month of April. That is the biggest monthly jump in thirteen years.
The possibility of serious inflation is frightening. I remember those ridiculously high interest rates in the late 1970s when people were paying as much as 18% for home mortgages. If it happens again, we are in serious trouble. The home buying market could collapse, and the economy would be hit hard. Also, consider interest on the national debt. The presently extremely low cost of borrowing has enabled the Federal government to service a debt in the 20s of trillions. What happens when the cost of borrowing goes up?
The Covid Pandemic caused the Federal government to spend enormous sums to keep the economy afloat. More recently, the Biden administration and the Democrat run Congress have been spending money like drunken sailors (my apology to the sailors) for a variety of programs, and more huge fiscal outlays are planned. Inflation will quickly compound the problem, and the debt could become unmanageable. How long can this continue? With Biden, Schumer and Pelosi at the helm, I am afraid that the ship of state will soon begin taking on water.