For those of us who remember the high inflation days of the 1970's, the prospect of low to no inflation is a little difficult to internalize. That said, the likelihood that prices will drop instead of rise is not only likely --- it's here.
Consumer inflation posts biggest drop in six years has the breaking news this morning:
"U.S. consumer prices fell 0.4% in December, the largest drop since the end of 2008, hit by tumbling prices for gasoline and other types of energy, according to government data released Friday.... Energy prices plunged 4.7% in December, the biggest drop since the end of 2008, as gasoline fell 9.4%, the U.S. Labor Department reported. Excluding the volatile categories of food and energy, the "core" reading of inflation showed that prices were unchanged in December, compared with a gain of 0.1% in November. . . . Consumer prices grew 0.8% in 2014 -- the second smallest calendar-year increase in the last five decades. Inflation-adjusted average hourly earnings rose 0.1% in December."
Inflation may not be dead, but it's definitely no longer a threat.
Economic growth and the ability of government and individuals to live within our means, and stop from expanding, let alone repaying some of that huge debt, are huge issues facing America and the rest of the world as well.
Growing government debt and ever higher consumer borrowing levels won't help. It's time to face facts and deal with reality.
There are not now, and never really were, any free lunches out there. Somebody always has to produce and pay for what we 'eat' --- at least eventually
That's my take.