Paying More to Stay Cool This Summer
Inflation, supply, and demand are all factors; so is government policy
Rising fuel prices are not just making it harder to take the all-American family road trip this summer. It’s also making it harder for some people to stay home.
Rising fuel prices are just one aspect of inflation. And we currently have the highest rate of increase to the CPI (consumer price index) in over 40 years. This is the inflation that hurts working people the most.
Inflation — it’s good for some, bad for others
Inflation is great for some. Those who owe money will find that they are paying less in real terms to service their debt. The federal government comes out ahead in this scenario because it our national debt loses value. Also, inflation raises wages — which pushes people into higher tax brackets. That means more revenue for the IRS to collect. Ka-ching!
For those on fixed incomes, inflation is a disaster. They have the same amount to spend each month but can buy less with it. For working class people, inflation can be a killer. Some will go broke, and the more that people on the bottom go broke, the more the money flows upwards. I mean, it has to go somewhere, right?
This results in an inflationary cycle that will see the rich get richer while those at the bottom fall further behind.
Will you be cool this summer?
According to the U.S. Energy Information Administration (EIA), people have seen their electricity bills skyrocket. In 2022, we saw the average cost of electricity go up 8.1% in January, 3.6% in February, and 8.8% in March. What makes this particularly troublesome — spring is not the time when prices go higher. Electricity tends to be cheaper in January and most expensive during the summer months.
The EIA gave what I consider a conservative estimate when it said that we’ll see energy prices about 3.9% higher over the summer months this year vs. last year.
I think summer electric bills will be higher and that there will be blackouts in many places.