Stagflation: And now others are predicting it. How to prevent it, and why

Government exists to protect and improve people’s lives. If it didn’t, why would we give it so much of our time, money, and freedoms?

Too often, people forget why they pay for a government. President John Kennedy once said, “Ask not what your government can do for you; ask what you can do for your government.”

Poetic, but also one of the least practical statements a president can make. The truth is, government should serve the people, not the other way around. Yet, some economists still claim the U.S. federal government can’t afford to help the poor, sick, and powerless, when in reality, as a Monetarily Sovereign entity, it can afford anything.

We are told the federal “debt” is unaffordable, when our Monetarily Sovereign federal government can afford anything — anything at all — and that people often have difficulty paying for their healthcare, education, transportation, housing and other needs.

The U.S. federal government has infinite money. It does not need tax dollars. If it wanted to, it could create trillions of dollars tomorrow while preventing inflation by curing shortages.

None of this is explained to you by our leaders. Instead, they try (and often succeed) to brainwash you into believing that Medicare for All, education for all, food for all, better roads and bridges, research and development — the better life for all — is unaffordable.

It is not. It is affordable. It is the most important purpose of government.

So why do our leaders lie? Two words: Gap Psychology. There is a human desire to distance oneself from those “below” in any measure — income, wealth, power — and to come closer to those “above.” 

Assume man “A” earns $100K, and he receives a raise to $110K. Man “B” earned $50K but he receives a raise to $100K . It is common for man “A’ to feel threatened. “Why should he get a big raise and I got a small  one.” Though “A” still earns more, he resents the Gap below him narrowing.

We see it everywhere: resentment toward the poor receiving free education, free food, free anything. Though the poor may be living on the edge, often going without food or decent housing or education, he has a false “fairness” belief (“It isn’t fair that they get free food or free anything.”)

Logically, it should make no difference to “A.” Nothing is taken from him. But he is envious, resentful, angry.

The rich use that emotion to support the belief that the federal government needs to cut Medicare and Social Security benefits and raise FICA taxes, to increase the Gap between the rich and the rest.

Here is an excerpt from a recent article:

SA analyst says a stagflationary recession risk is growing

10/15/2026

Wall Street tumbled Wednesday as hotter-than-expected inflation data intensified concerns over interest rates, with technology stocks leading the market lower and reigniting warnings about a potential stagflationary recession.

Seeking Alpha analyst Daniel Jones said the latest consumer price index figures reinforced the risk that persistent price pressures could force the Federal Reserve to maintain a restrictive policy or consider additional rate hikes.

On September 22, 2026, we wrote this: 

Fed Chair Powell pushes the economy over the cliff. Next stop: Stagflation

The past interest rate increases have done nothing to halt or even moderate inflation. So, Chairman Powell does the only “sensible” thing. He keeps doing what repeatedly has failed, praying that somehow, in some way, magic will happen.

To fight higher prices, the Fed will raise the prices of mortgages, autos, and business operations — and just about every other thing you wish to buy. And some people believe this nonsense.

For many years, economists have been taught that higher interest rates reduce borrowing, spending, and investment, thereby reducing demand and slowing inflation.

The presumed chain of events is:

1. Higher interest rates make borrowing more expensive.
2. Consumers buy fewer houses, cars, and other goods.
3. Businesses reduce borrowing, investment, and hiring.
4. Total demand for goods and services falls.
5. With less demand competing for available supply, businesses have less ability to raise prices.

Higher interest rates supposedly fight inflation by reducing demand. The theory assumes that the demand-reducing effects outweigh the inflationary effects of higher borrowing costs and increased interest income.

What is another name for #s 1, 2, 3, 4, and 5? RECESSION. 

Economists have been taught in school that the cure for inflation is higher prices and recession. It is madness. It is the often-proven disastrous AUSTERITY.

Inflation is caused by shortages of crucial goods and services, so to cure inflation one must cure the shortages. You don’t cure shortages by impoverishing the public and causing a recession; you address them directly. 

If the shortage is of oil, the government should fund additional exploration, drilling, refining, storage, shipping, and importing. It also should fund alternative energy like solar, wind, geothermal, and nuclear, plus R&D to use fossil fuels and non-fossil fuels more efficiently.

More energy sources + better use of energy = no shortage + prosperity. 

Increased costs via higher interest rates + less availability of products  and services = recession and poverty.

If the shortage is of food, the government should fund farming R&D, education, land use, crop cultivation, shipping, packaging, and retail. It should not impoverish the nation in a theatrical, inflation-reductioin ruse  —especially when the proposed benefit cuts and tax increases disproportionately harm the middle and lower classes.

Congress, funded by the ultra-wealthy, possesses the tools to eliminate shortages; the Federal Reserve does not. Yet, Congress conveniently has offloaded the task of inflation control onto the Fed.

And that is the whole point.

Recessions impose costs on everyone, but they are devastating for the “not-rich.” They provide a pretext for federal austerity: benefits are slashed, taxes are hiked, the vulnerable suffer, and the wealthy acquire assets at bargain prices.

When the recession finally wanes, the non-wealthy find their benefits permanently slashed and their tax burdens increased, while the ultra-wealthy have secured assets at bargain prices. These acquired assets appreciate tax-deferred and are ultimately subject to the lowest capital gains rates.

Conversely, if the average worker earns a raise, it immediately is taxed at the highest marginal rates. Even those prudent enough to save through an IRA see their hard-earned money taxed at these peak rates upon withdrawal.

Consequently, the wealth Gap widens, which is precisely the outcome desired by the wealthy and the Federal Reserve.

So thank you, Fed and Congress, from those who are in the upper 2%, for the stagflation-widening Gap, which makes the rich ever richer and the poor their permanent — even willing — servants. The not-rich have been taught that federal deficit spending is a financial problem whereas unaffordability for the rest of America is expected.

Sadly, you of the not rich accept the devastating lie that y9u should, “Ask not what the goverment can do for you, but ask what you can do for the government.” 

It is the lie that, if you believe it, will impoverish your family, forever.

At long last think:

1. The federal government has infinite money. Unlike state/local governments it doesn’t need tax dollars. It creates all the dollars it needs by voting for them. I never can run short.
2. Increasing interest rate raises the prices it supposedly reduces.
3. The cure for inflations is not to quench demand by depressing the economy. The cure is to reduce shortages by targeted federal spending.
4. Federal debt and deficits are not problems for taxpayers. Despite the words negative-sounding words “debt” and “deficit,’ they actually are assets to the economy. The higher the deficit, the faster the economy will grow. 

Ignorance is costly. If you vote with ignorance you will suffer with stagflation — unless you are very rich.

Rodger Malcolm Mitchell

Source: https://mythfighter.com/2026/10/16/stagflation-and-now-others-are-predicting-it-how-to-prevent-it-and-why/