Comment by anon291

Many people made a lot of money during the pandemic whether by stock or government handouts. American savings rates soared during the pandemic. Many view this as a success of the child tax credit. That's one view. The alternate view is that COVID shutdowns depressed the availability and desirability of goods and services. Why keep up with the Joneses if you never see them? Entire industries were deemed dangerous and demand dropped...

Once things reopened, people started spending their savings. It's not that the tax credits and bailouts reduced poverty. It's that not having anything worth buying made people save their money instead.

But once things became available again, there was suddenly a lot more money chasing smaller numbers of goods (it takes time for production to ramp up). This leads to higher prices, and inflation.

As this goes on, people start demanding higher wages to keep up with price growth. Once that happens, price growth is fixed. No one's going to accept to a pay cut.