Inflation can reduce my purchasing power for things experiencing inflation. Unemployment can reduce my income by 100% making my purchasing power equal to zero.

Inflation can reduce my purchasing power for things experiencing inflation. Unemployment can reduce my income by 100% making my purchasing power equal to zero. Further, underemployment and lagging wage growth will be far worse for workers than 5% inflation. The fed is a mechanical device designed to combat inflation by destroying productivity and growth and inducing economic contraction by spurring savings and making expansion more expensive and making businesses that operate on revolving credit lines impossible to run. Not everything is inflating, and even if inflation eats away wage growth, at least people have jobs. Over time inflation drives investment - as there are more dollars the ability to capture them increases if you can increase your productivity and reduce the prices you charge. It’s perhaps counter intuitive but inflation induces a decrease in prices over time so long as you don’t make borrowing more expensive. the typical response to inflation is to raise borrowing which inhibits price competition. Inflation is an excess of demand for supply. Supply increases to meet demand over time. It is true if you print money you see inflation. But when you stop printing money supply grows to meet demand. We stopped printing money already. If we left borrowing cheap, supply would meet demand and inflation would stop and we would probably see a growth based deflationary period.