Today’s inflation is not a Federal Reserve problem

Chuck Ezy Kelly
2 min readMar 30, 2022


It’s not a money supply problem. It’s a wealth and income disparity problem. Only Congress and the executive branch can solve it.

(The graph stops at 2015 because it was made by a commercial artist for a book at that time. However, it still clearly instructs us about how tax policies affect America’s deficit, and suggests why the wealth and income disparity between the rich and everyone else is getting worse.)

The main cause of today’s inflation is the exploding disparity in wealth and income between the rich and everyone else.

And when the Federal Reserve raises interest rates to control inflation, it hurts those who have to borrow money to buy things like cars and homes. It doesn’t hurt those rich enough to pay cash for everything.

It happens at all levels of wealth. When billionaires buy castles in Europe they decrease the supply, and raise the cost to others, like mere millionaires.

When millionaires buy multiple homes in desirable locations so they can build a mansion, they raise the price for multiple-thousandaires who would like to buy those homes to rent to those who can’t afford to buy a home.

When the marginally well-off people go to restaurants, athletic events, concerts and so on, they allow all those businesses to charge a lot more for what they do. And those struggling to make ends meet lose their standard of living.

Solution: High progressive tax rates on the wealthy to decrease their inflationary spending — and government financing for infrastructure, health care, education and those programs that the middle class and poor depend on.

That’s how we created the greatest middle class in the world between 1933 and 1980! It was a rare period of U.S. history when beneficial wage inflation rose along with wealth inflation.