Grocery prices Haven't Come Down Since Peak Inflation

[Weird Tolkienish Figure]

[DefiantMassRINO]

GOP Congress won't make any legislative contributions to fighting inflation.  They're as useless as an ice maker in Antarctica.

[Luis Gonzalez]

GOP Congress won't make any legislative contributions to fighting inflation.  They're as useless as an ice maker in Antarctica.

Inflation has already come down. What are you talking about?

But here’s what people miss: inflation is cumulative. Once prices rise because the dollar loses value, they don’t simply snap back. Sellers aren’t “greedy.” They’re responding to a dollar that buys less. If the currency is worth less, it takes more of them to buy the same goods.

From 2020 through early 2024, cumulative inflation was roughly 25–26% based on CPI data. In plain terms, a dollar today buys about 76 cents worth of what it did in 2020. That purchasing power is gone. It doesn’t magically reappear.

The spending and borrowing spree drove that loss in value. Every dollar saved. Every paycheck earned. Quietly reduced by about a quarter.

Now the same people who helped create the problem pretend it can be “fixed” by forcing prices back to pre-pandemic levels. That’s not how monetary debasement works. You don’t rewind the tape without causing a severe recession or deflationary shock.

Blaming Republicans today for not rolling prices back to 2020 levels ignores basic economics. It also plays directly into the political narrative that inflation is something you can reverse like flipping a switch.

It isn’t. And pretending otherwise just muddies the debate

[Cyber Liberty]

Inflation has already come down. What are you talking about?

But here’s what people miss: inflation is cumulative. Once prices rise because the dollar loses value, they don’t simply snap back. Sellers aren’t “greedy.” They’re responding to a dollar that buys less. If the currency is worth less, it takes more of them to buy the same goods.

From 2020 through early 2024, cumulative inflation was roughly 25–26% based on CPI data. In plain terms, a dollar today buys about 76 cents worth of what it did in 2020. That purchasing power is gone. It doesn’t magically reappear.

The spending and borrowing spree drove that loss in value. Every dollar saved. Every paycheck earned. Quietly reduced by about a quarter.

Now the same people who helped create the problem pretend it can be “fixed” by forcing prices back to pre-pandemic levels. That’s not how monetary debasement works. You don’t rewind the tape without causing a severe recession or deflationary shock.

Blaming Republicans today for not rolling prices back to 2020 levels ignores basic economics. It also plays directly into the political narrative that inflation is something you can reverse like flipping a switch.

It isn’t. And pretending otherwise just muddies the debate

100% correct!  Prices coming back down would be deflationary, and that presents a brand new set of economic consequences.  Income needs to expand to re-acquire the lost buying power. 

Inflation is a ratchet.

[Luis Gonzalez]

100% correct!  Prices coming back down would be deflationary, and that presents a brand new set of economic consequences.  Income needs to expand to re-acquire the lost buying power. 

Inflation is a ratchet.

Exactly.

Two consecutive quarters of negative inflation is a Recession.

Five or more is a Depression.

[Smokin Joe]

Prices are what prices are.

Inflation is the rate at which those prices are changing.

That rate has slowed to under 3%, and is lower in some sectors.

Prices that were driven by shortages in supply have come down where those supply issues have been sorted out (gasoline, eggs, for two items).
Beef hasn't come down because it takes time to rebuild the herds, and while imports may drop prices a little temporarily, they actually make it harder for livestock producers to build those herds, which will essentially amount to doing more work for less money per head. Still, it takes longer for a calf to gestate than a human, and then it has to grow to be marketable for a couple more years.

Essentially, though prices are one thing, the result of inflation. Inflation is the rate those prices change, not the change itself, and reducing inflation does not reduce prices unless the inflation rate goes negative (which is deflation, and that's generally considered bad because the value of anything bought on installments will drop below the price paid for it). If you want a reason to NOT buy stuff, that is one, just wait until it's cheaper next week, at least until the people producing it stop because they are losing money.

Peak inflation under Biden was at 8%, and now it's roughly a fourth of what it was, so inflation has dropped about 75%. The prices have not dropped because inflation is still a positive number.

[Luis Gonzalez]

Inflation is a ratchet.

Inflation is a choice made by the federal government.

There is more spending than revenues, the feds have choices.

1. Not spend the money. That would have all manners of consequences where we can’t pay our bills.
2. Raise taxes. Highly politically unpopular.
3. Borrow the money (print) and devalue the entire money supply in the nation in one fell swoop, which means that the transferred their $$$ shortcoming to us, then act surprised when prices go up, blame the other guy, and avoid risks to their political career.

[roamer_1]

100% correct!  Prices coming back down would be deflationary, and that presents a brand new set of economic consequences.  Income needs to expand to re-acquire the lost buying power. 

Inflation is a ratchet.

That's right. But sooner or later you have to recognize that there are too many Benjamins in the air.

Either you take it out of the top by a deflationary method (real interest rates to slow things down... Burning excess dollars to raise dollar value...)

OR it comes out of the bottom in massive bankruptcies and failures. That's how the bottom makes many Benjamins disappear.

One or the other. It's coming either way. A responsible deflationary strategy from the top would be the least harmful way. But that ain't gonna happen. 

[Cyber Liberty]

Inflation is a choice made by the federal government.

There is more spending than revenues, the feds have choices.

1. Not spend the money. That would have all manners of consequences where we can’t pay our bills.
2. Raise taxes. Highly politically unpopular.
3. Borrow the money (print) and devalue the entire money supply in the nation in one fell swoop, which means that the transferred their $$$ shortcoming to us, then act surprised when prices go up, blame the other guy, and avoid risks to their political career.

Option number one is the least bad.  Spend within our means, what a concept!

You and I understand economics, as do most of the people on TBR.  Those who demand 2020 prices across the board do not, and that's what the Democrat demagogues prey upon.  I  see that a lot on X, because it's full of idiots. I expect better on TBR.

[Cyber Liberty]

That's right. But sooner or later you have to recognize that there are too many Benjamins in the air.

Either you take it out of the top by a deflationary method (real interest rates to slow things down... Burning excess dollars to raise dollar value...)

OR it comes out of the bottom in massive bankruptcies and failures. That's how the bottom makes many Benjamins disappear.

One or the other. It's coming either way. A responsible deflationary strategy from the top would be the least harmful way. But that ain't gonna happen. 

100% correct, top to bottom.  You understand Econ 101!   

[Bigun]

Inflation has already come down. What are you talking about?

But here’s what people miss: inflation is cumulative. Once prices rise because the dollar loses value, they don’t simply snap back. Sellers aren’t “greedy.” They’re responding to a dollar that buys less. If the currency is worth less, it takes more of them to buy the same goods.

From 2020 through early 2024, cumulative inflation was roughly 25–26% based on CPI data. In plain terms, a dollar today buys about 76 cents worth of what it did in 2020. That purchasing power is gone. It doesn’t magically reappear.

The spending and borrowing spree drove that loss in value. Every dollar saved. Every paycheck earned. Quietly reduced by about a quarter.

Now the same people who helped create the problem pretend it can be “fixed” by forcing prices back to pre-pandemic levels. That’s not how monetary debasement works. You don’t rewind the tape without causing a severe recession or deflationary shock.

Blaming Republicans today for not rolling prices back to 2020 levels ignores basic economics. It also plays directly into the political narrative that inflation is something you can reverse like flipping a switch.

It isn’t. And pretending otherwise just muddies the debate

A+ 

I could write a book on the points raised by this one post.

[Cyber Liberty]

A+ 

You are on my list of who understand Economics. 

[Bigun]

100% correct!  Prices coming back down would be deflationary, and that presents a brand new set of economic consequences.  Income needs to expand to re-acquire the lost buying power. 

Inflation is a ratchet.

  And it doesn't just affect prices. It drives the percentage of your income the government takes in taxes ever upward.

[Hoodat]

But here’s what people miss: inflation is cumulative. Once prices rise because the dollar loses value, they don’t simply snap back. Sellers aren’t “greedy.” They’re responding to a dollar that buys less. If the currency is worth less, it takes more of them to buy the same goods.

From 2020 through early 2024, cumulative inflation was roughly 25–26% based on CPI data. In plain terms, a dollar today buys about 76 cents worth of what it did in 2020. That purchasing power is gone. It doesn’t magically reappear.

The spending and borrowing spree drove that loss in value. Every dollar saved. Every paycheck earned. Quietly reduced by about a quarter.

Now the same people who helped create the problem pretend it can be “fixed” by forcing prices back to pre-pandemic levels. That’s not how monetary debasement works.

Correctamundo.  If you want to bring prices down, then start by balancing the budget and paying back the Fed.

[Luis Gonzalez]

Correctamundo.  If you want to bring prices down, then start by balancing the budget and paying back the Fed.

One thing has nothing to do with the other.

[Hoodat]

One thing has nothing to do with the other.

The first means that we stop expanding the money supply to fund government.  The second means that we begin reducing it.  Paying back the Fed effectively removes that money from circulation.

[libertybele]

There are a few grocery items that I have noticed that have come down a little bit.  Prices are never going to completely come down to the pre-Biden era. Grocery prices never came down to pre-Carter era..

Prices of other items items such as gas have come down a bit, our car insurance went down a bit ... and hopefully utilities will follow, along with insurance and taxes.  There is a lot of fraud out there which doesn't help.

Trump inherited Biden's disastrous economy, but ultimately now it is Trump's economy.  He's facing several roadblocks which isn't helping.  I still believe IF anyone can fix the economy it's him and he can direct Congress to balance the budget, but getting that done is going to take a small miracle...that and the GOP holding the Senate and House.