I have vague memories of my parents scrimping and saving during my economically challenged childhood, a common experience that defined my generation. Born between 1965 and 1980, Gen X-ers sought higher levels of education, and used caution and pragmatism in an attempt to avoid the divorces, latch-key parenting, and poor financial outcomes they’d experienced as children.
My Boomer parents married hastily as teenagers, and thereafter struggled to manage a young family while earning their bachelor’s degrees and starting their careers, my mother eventually becoming a grade school teacher and my father a small business owner. My first memories are of Brady’s Trailer Court, where we lived until I was 3, then the small house on Seventh Street, and finally the modest brick ranch just outside of town which marked the pinnacle of my parents’ financial success after so many years of hard work.
Like the rest of Gen X, my childhood experiences subconsciously spawned in me the drive to attain a more comfortable economic level than my parents had. I went to college, then law school, determined avoid the economic stresses of my childhood.
However, I never understood that a major factor in my parents’ financial struggles was “The Great Inflation,” a 17-year period when the annual rate of price increases in the U.S. went from 1% in 1965 to 14.4% in 1980, and interest rates rose to nearly 20%. I didn’t know that inflation had created a no-win situation for my parents, and that no matter how hard they worked, they got slammed with ever-rising prices, gas shortages and sky-high interest rates. All I knew was that my parents worked extremely hard to achieve mediocre financial success.
And now, over forty years later, our country is being gripped by inflation, gas shortages and rising interest rates once again. How will it affect young families, specifically military families? Will young Millennials, Gen Yers and Gen Zers find, like my parents did, that no matter how hard they work to achieve, they can’t attain their financial goals?
The answer to the question of whether we are currently experiencing a second Great Inflation seems to be, “Not quite.” Although economists are calling current inflation rates “disturbing” and “reminiscent of the Great Inflation,” they stop short of saying that history is repeating itself. Economists admit that the comparison of 1970s inflation and COVID-era inflation “is valid because an aggregate-supply shock instigated each inflationary experience,” but they say the two are slightly different, siting some gibberish about the Bretton-Woods System, the Phillips Curve, Keynesian macroeconomics and other economist egg-head theories that I don’t understand.
What concerns me is that, whether or not COVID-era inflation is the same or different than the Great Inflation, experts are warning that current inflation rates effectively defund the military and cause a pay cut for military families, many of which are already experiencing food insecurities, affordable housing shortages and devastating gas prices. Although the Pentagon reported to Congress that it didn’t plan to change the defense budget to account for inflation because it didn’t track such data, some military commands are openly acknowledging the “mental toll” inflation is taking on its families by offering free financial counseling, resources and programs and monthly bonuses.
The White House and Congress have proposed a 4.6 percent pay raise in 2023, the highest in two decades; however, with inflation at 9.1% in July, military families may still be left struggling. For lower income military families who still may feel the pinch of inflation even after the pay raise takes effect, they are encouraged to contact the Military Family Advocacy Network for food insecurity assistance, or their branch military relief societies such as Army Emergency Relief Society, Navy Marine Corps Relief Society, Air Force Aid Society and Coast Guard Mutual Assistance. Find links to these resources at www.militaryonesource.com.
The current circumstances are too complex to know whether the Great Inflation is repeating itself, but one thing is for certain: Inflation, no matter if it happened 40 years ago or is happening today, is most definitely not great.
Molinari is an award-winning syndicated columnist, author, blogger and speaker, as well as the wife of a Navy retiree.