Reno Reporter

The Congressional Budget Office released a report in February estimating that the U.S. national debt will reach 107% of the GDP by 2031 if existing tax and spending laws remain unchanged.

The report also indicated that the existing public debt, which was 100% of the GDP at the end of the fiscal year 2020, is expected to reach 102% of GDP by the end of the fiscal year 2021.

Brian Loy, president of Reno-based Sage Financial Advisors, wrote in the Reno Gazette Journal that Americans must take precautions to protect themselves from current inflation, which "erodes purchasing power."

"A stable economy generally has stable predictable inflation and activity," Loy wrote. "Instability comes with runaway inflation — that’s when prices constantly rise and currency is worthless and less, such as what happened in the ’70s and ’80s (or worse, with Venezuela’s hyperinflation)."

Loy, who also referred to inflation as the "silent menace," stated that the best approach for individuals to counter this erosion is to diversify their investments in order to prevent having them devalued in tandem with the dollar.

"We try to save for future goals such as retirement, but escalating costs create gaps that need to be filled," Loy continued,. "If you need $8,000 per month to maintain your desired lifestyle and inflation averages 3%, then you’ll likely actually need $16,000 per month to maintain that same lifestyle (presuming retirement in 24 years). I know, it can seem like a complex SAT question, but you can feel fairly certain that the cost of your desired lifestyle today will increase by the time you retire, meaning you’ve got to aim for the future amount as you plan now."

Additionally, former Clinton administration Treasury Secretary Lawrence Summers cautioned against President Joe Biden's recent economic stimulus package in an op-ed in The Washington Post, stating that it would  likely “set off inflationary pressures of a kind we have not seen in a generation.”

"Given the commitments the Feds (Federal Reserve) has made, administration officials’ dismissal of even the possibility of inflation, and the difficulties in mobilizing congressional support for tax increases or spending cuts, there is the risk of inflation expectations rising sharply," Summers wrote. "Stimulus measures of the magnitude contemplated are steps into the unknown."

In a report by the New York Post, a Harvard CAPS/Harris poll found that 85% of Americans are “somewhat concerned” about inflation and of that group, 45% reported being “very concerned.” The poll also revealed that approximately half of the respondents don’t trust Biden’s Federal Reserve to properly handle inflation.

Additionally, The Wall Street Journal published an op-ed by Tim Congdon, chairman of the Institute of International Monetary Research, claiming that the Federal Reserve is currently staffed by "New Keynesian" economists who are misjudging the current threat of inflation and paying insufficient attention to the amount of money pumped into the money supply.

According to a report by the Federalist, the U.S. money supply has risen by 40% since the start of the COVID-19 pandemic, compared to the previous period of high inflation in the 1970s, during which the money supply increased by only 13%.