Attempts to lower inflation destroyed other aspects of the global economy

[Patricia and Jack, 7-5-2024, The New York Times, “Political Unrest Worldwide Is Fueled by High Prices and Huge Debts,” https://www.nytimes.com/2024/07/05/business/global-economy-debt-inequality.html, accessed 7-11-2024, CM]

Economic problems always have political consequences. Yet economists and analysts say that a chain of events set off by the Covid-19 pandemic created an acute economic crisis in many parts of the planet, laying the groundwork for the civil unrest that is blooming now.

The pandemic halted commerce, erased incomes and created supply chain chaos that caused shortages of everything from semiconductors to sneakers. Later, as life returned to normal, factories and retailers were unable to match the pent-up demand, boosting prices.

Russia’s invasion of Ukraine added another jolt, sending oil, gas, fertilizer and food prices into the stratosphere.

Central banks tried to rein in inflation by increasing interest rates, which in turn squeezed businesses and families even more.

While inflation has eased, the damage has been done. Prices remain high and in some places, the cost of bread, eggs, cooking oil and home heating is two, three or even four times as high as it was a few years ago.

As usual, the poorest and most vulnerable countries were slammed the hardest. Governments already strangled by loans they couldn’t afford saw the cost of that debt balloon with the rise in interest rates. In Africa, half of the population lives in nations that spend more on interest payments than they do on health or education.