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September 27, 2013 9:34 AM The Truth About Inflation

By Jonathan Bernstein

I don’t recall ever seeing this one; it doesn’t surprise me, but, you know, this is just crazy talk:

Over the next twelve months, do you expect that the cost of living  – that is, what you pay for everyday goods and services  ─ will increase, decrease, or stay about the same?
Decrease……………………………………. 1
Stay the same …………………………….. 22
Total increase……………………………….77
    Increase 1% to 3% ………………….. 23
    Increase 4% to 5% ………………….. 18
    Increase 6% to 10%…………………. 15
    Increase 11% or more………………. 15
    Increase not sure how much…………  6 

So more than one in seven believe that inflation will be over 11% next year, and three in ten, total, have it at 6% or more. In real life, it’s unlikely that inflation will hit 2% next year.

That’s from a Hart/Public Opinion Strategies poll, which also has the somewhat helpful results that people think the budget deficit has become worse in the last year by a 8/66 (better/worse) margin, and that while Obamacare gets a 29/46 positive/negative split, “Affordable Care Act” returns a 24/37 result.

Click through for the long term trends, going back to 2007, on inflation. Just eyeballing it, my best guess is that it basically follows optimism and pessimism about the economy overall; people perceive prices going up more during hard times than good times, even though the truth is roughly the opposite. Unfortunately, all we get here is inflation expectations, not perceptions of how things have changed.

There is a famous finding that Democrats believed that inflation got worse during the Reagan years (contrary to the plain fact that it got much better). Hart/POS don’t give us a partisan breakdown here.

I’d like to think that the 15% who expect Carter-level inflation next year are Tea Partiers who actually believe that Fed policies will produce runaway inflation, but it’s probably more likely a combination of partisan Republicans who just select the worst possible option and people who have no idea what “11%” means.

No larger point here; just thought it was interesting that fear of inflation, or at least survey answers that look like fear of inflation, are incredibly persistent.

[Cross-posted at A plain blog about politics]

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Jonathan Bernstein is a political scientist who writes about American politics, especially the presidency, Congress, parties, and elections.
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