As 2022 is coming into full swing, so is a slew of new economic issues – a major one being inflation.
Dr. Douglas Lainson, associate professor of business, described the issue as being exacerbated by the pandemic due to the vast amount of government aid given to people during the pandemic, worsening the national debt problem. He also credited the supply chain issue, also due to the longstanding effects of COVID-19.
“One of the definitions of inflation is too much money chasing too few goods,” Lainson said. “So if everyone has more money they’re going to go out to buy stuff. If we can’t make enough stuff, what happens to the price? It goes up. That’s inflation.”
Many areas of everyday life have been affected by inflation. Lainson used the rising prices of masks and at-home testing kits as an example.
“The demand for masks is through the roof,” Lainson said. “When demand goes up, price goes up. We normally don’t make this many masks, so manufacturers have had to ramp up significantly by making more masks and increasing production. Increasing production that quickly is expensive.
“As demand continues to go up, it will continue to push up prices. Testing is the same issue. The government has stepped in and offered to pay for masks and tests, they’re spending more money, making our national debt keep going up.”
Ander Sevilla, senior business administration major, is the CEO of Swan Society NFT, an NFT project that partners with Water.org to attempt to bring clean, safe water to countries that need it. He noted how the recent inflation crisis has impacted business ownership, operation,and how meetings are held.
“Recent inflation issues in the U.S. economy have affected me not only as an individual but as a business owner,” Sevilla said.
“Working in the financial industry, there is a direct correlation between inflation and operational strategies. Given the current state of the economy, my company has been forced to pivot several times in order to remain profitable.”
Madison Agusto, senior marketing major, said that the present inflation issue has affected both her personal life and the life of the nation. She mentioned the staffing crisis affects small businesses. The biggest issue she has faced in her personal life is the rise of gas prices due to inflation.
“Gas prices have probably been the biggest issue for me,” Agusto said. “I drive home to help my parents a lot so it’s been expensive filling up gas so much when it’s so high.”
As this issue progresses, Lainson projects that the current pattern is going to continue. Lainson said that many college students will continue to be greatly affected by rising inflation.
“Costs of everything for students is going to go up,” Lainson said. “So gas going in your cars, food at the grocery store and food at fast-food restaurants is going up. Students on limited budgets are going to have to figure out what they’re going to sacrifice in order to pay for basic necessities. Over time, if this continues CBU won’t have a choice but to raise prices.”
The Federal Reserve is currently trying to reduce the supply by pulling the extra money out of circulation to try to combat the issue. Interest rates are expected to continue rising as a result.