Paul Krugman wants to know why there is a disconnect between the actual state of the economy and public perceptions of it. There are two simple reasons:
- While the country is better off than it was last year as a result of rising wages, a low unemployment rate, buoyant markets, and federal pandemic payments, the benefits of the stimulus payment are no longer being felt, while inflation is now. It is a question of timing. That said, I suspect that if you asked the public if they would happily give the stimulus payments back in exchange for lower inflation, they would say no.
- Unemployment only affects the unemployed. Inflation affects everyone.