Inflation’s Root Cause, Reagan’s Compromise, and Constitutionalists’ Solution
Reagan reset inflation from high back to low but didn’t uproot inflation’s root cause: spending.
February 4, 2022
Inflation is created by Progressives to pay for government spending.
The 1965 to 1982 Great Inflation  was ended by Ronald Reagan through a compromise. Reagan reduced money creation and tax rates but didn’t reduce government spending.
Constitutionalists will eliminate inflation by eliminating unconstitutional operations.
Inflation Is Stealth Payment of Government Spending
Customers can see that producers keep making products that work better, and that producers keep using improved computers and communications to produce more efficiently. And yet customers don’t see producers reducing their asking prices, we see producers increasing their asking prices.
Progressive central bankers step in to reduce Progressive politicians’ interest payments.
One way Progressive central bankers reduce Progressive politicians’ interest payments is by reducing interest rates . To do this, Progressive central bankers help other Progressive bankers create money out of thin air .
Progressive bankers then can lend lots of newly-created money.
Customers then can get loans at lower interest rates, and they have more money in hand. The newly-created money isn’t distributed evenly ; it starts in the hands of some customers, and their buying gradually  puts new money into the hands of others. All along the way, various customers have more money in hand, so they try to buy more of various products .
Producers ramp up production and eventually also raise their asking prices . Once any producer raises his asking price, his customers’ costs go up, so these other producers must also raise their asking prices. This is true for producers of assets, producer products, consumer products, and employee labor. Eventually all producers must raise their asking prices.
The second way Progressive central bankers reduce Progressive politicians’ interest payments is by reducing the value of Progressive politicians’ debts .
Progressive politicians borrow current money that’s valuable and later only offer to repay with future money that’s worth less. They in effect default on their debt in slow motion .
So Progressive bankers’ money creation reduces interest rates and effectively reduces debts, in both ways bailing out Progressive politicians.
Since they’re constantly being bailed out (at our expense), Progressive politicians spend even more. Their past spending created the existing debt and their current spending adds more debt.
Inflation, then, is no mystery.
Producers’ naturally-falling prices become rising prices, because customers demand more products, because Progressive bankers create more money out of thin air, because Progressive politicians spend.
Inflation has nothing to do with non-crony businesspeople’s  greed. Non-crony businesspeople add value to satisfy customers’ wants.
Inflation has everything to do with Progressive politicians’ greed. Progressive politicians spend to satisfy themselves.
Politicians’ spending depends on who runs for office in future elections, who wins, and how well each winner limits governments.
Reagan Slashed Inflation but Not Spending
Reagan won the presidency because people thought that “the most important problem facing the country” from 1973 to 1981 was “the high cost of living” , and voters could see that Jimmy Carter wouldn’t eliminate high inflation .
High inflation was incentivizing people to spend money quickly, and to borrow current money that was valuable and repay with future money that would be worth less.
Congresspeople suggested trying to reduce inflation without letting it hurt much in the short run, by creating various programs or by hiring different people . Such changes would have lengthened the transition period, likely reduced the positive change, and likely made the transition fail, like every past inadequate attempt had failed.
Reagan held his ground. Reagan didn’t have to do anything more himself, because Paul Volcker, the chairman of the Fed, was able and willing to slow the money creation .
Low inflationary price changes started appearing quickly, which started incentivizing people to hold money for near-term uses, borrow less, and invest more carefully.
Reagan separately championed legislative programs to cut the high tax rates on the people who create the most jobs . These changes incentivized business decisionmakers to invest.
Reagan also championed legislation to deregulate industries. In the deregulated industries, these changes incentivized new competitors and existing competitors alike to innovate and invest.
Reagan also spoke out against big government. Franklin Roosevelt had done the opposite, speaking out in favor of big government and attacking businesspeople.
In reducing money creation, reducing tax rates, supporting deregulation, and speaking out against big government, Reagan did the right things—the things that were technically smart  and emotionally smart —and let the chips fall where they may.
Elsewhere, Reagan didn’t do the right things.
Reagan didn’t refuse to execute unconstitutional spending and much unconstitutional regulatory-agency lawmaking. Reagan didn’t champion repeals of the unconstitutional statutes that enabled this spending and regulatory lawmaking.
But even so, Reagan’s partially-constitutionalist compromises and resulting success back then have prepared the way for fully-constitutionalist action as soon as we’re ready to build on this proven success.
Constitutionalists Will Make Customers King
What’s hard for constitutionalists is to get past the two Progressive-dominated major parties and get elected.
Even so, constitutionalists are already getting elected in growing numbers. An influential minority earns Conservative Review Liberty Scores  of at least 80% pro-liberty.
Other complementary paths are also feasible. Activists can start voter-information meetings . A politician can run as a Republican for Congress, build credibility, and run repeatedly as an independent for president . Activists can have their counties secede from state governments to form constitutionalist county-region governments .
What’s simple for constitutionalists is to take action once in office.
Progressives unconstitutionally use force to institutionalize activism that people wouldn’t pay for voluntarily .
Constitutionalists don’t need to create or administer large programs. Constitutionalists just need to not execute our governments’ activist organizations  and to repeal the enabling statutes .
Voters know well enough that governments’ researchers , regulators , and enforcers  don’t work for us, they work to empower themselves and their cronies. Voters won’t stop knowing this no matter how hard Progressive politicians and media try to whip up fear. Voters will strongly support stopping inflation by taking away government people’s jobs.
In every sector in which constitutionalists rightfully return decisions to where they belong—in the hands of customers —producers will stop lobbying to add value for crony politicians and will start innovating and investing to add value for customers.
Customers are individuals, after all, and it’s we the people as individuals who are the sovereign powers . By right, customers are king.
Inflation is Progressive politicians’ preferred hack to spend more and to excoriate businesspeople for the unavoidable resulting price increases. But we’re onto this racket, and we know the fix.
Inflation will be eliminated as quickly as voters get governments off our backs and secure our freedom .
James Anthony is the author of The Constitution Needs a Good Party and rConstitution Papers, has written in The Federalist, American Thinker, Foundation for Economic Education, and American Greatness, and publishes rConstitution.us. Mr. Anthony is an experienced chemical engineer with a master’s in mechanical engineering.