What is Shrinkflation?

What does a half-empty bag of chips have to do with government spending? Well that bag used to have more chips than air…that is until the government got in the way.

When politicians decide they want to spend money, someone has to pay for it. While taxpayer dollars are typically the default, the government has given itself some alternative options so they can spend way beyond their means. It can choose to ask other countries like China or Japan for a loan that will add to the national debt, or it can simply start printing more money.

Lately, the printing presses have been working overtime.

But more money being printed doesn’t mean more value has been created. There’s simply more green paper. This is how we get inflation, which is when the value of a dollar drops.

Inflation is, in part, why your grandparents could get a hamburger for a nickel but today it costs you several bucks. And inflation is happening more rapidly today than it has in years thanks to historic spending by congress.

Inflation leaves the companies that make the products in a tight spot. They have two options. One, they can either raise prices and risk spooking consumers. Or two, they can cut down on the product they give you for the same price. This is a problem known as “shrinkflation.”

Shrinkflation leaves chip bags with more air, toilet paper rolls with fewer sheets, and king-sized candy bars that look a lot more like fun-sized candy bars. So next time you feel slighted by an air-filled family-sized bag of chips, know that the government’s never-ending spending and the inflation it causes may be to blame.