As has been widely reported, the Bureau of Labor Statistics (BLS) released the latest inflation numbers last Thursday, and they were ugly. The Consumer Price Index (CPI) rose 7.5 percent during the 12-month period ending in January, its largest one-year spike in 40 years. This dwarfs the inflation rate of 1.4 percent that President Biden and the Democratic Congress inherited in January of 2021. BLS also reported that real earnings decreased 1.7 percent from January 2021 to January 2022. All of this is directly attributable to the incompetent economic policies of the Biden administration and wild spending by congressional Democrats in the midst of a supply chain crisis.
By July, inflation had risen to 5.4 percent, but Biden assured Americans that the increase was only “temporary.”
Inflation on this scale is new to most Americans. According to the Brookings Institution, more than half the current U.S. population had not yet been born the last time prices were rising at such an alarming rate. Moreover, considering the decades-long decline in the quality of public education, the direct relationship of reckless Democrat spending to the skyrocketing cost of living may not be clear to most Americans. The source of inflation isn’t difficult to see — if one has been taught basic economics. As Milton Friedman famously put it, “Inflation is caused by too many dollars chasing after too few goods.” And the result is by no means abstract. As Gwynn Guilford explains in the Wall Street Journal, you are living it right now:
The average U.S. household is spending an additional $276 a month because of inflation that is rising at its fastest rate in 40 years, a new economic analysis showed. The squeeze stems from higher prices across a range of products and services, including cars, gasoline, furniture and groceries.… Research shows that inflation is also squeezing some groups, on average, more than others.… Those ages 35-44 saw their costs rise 6.9% in 2021, higher than any other age group, though the rate for younger age groups was just slightly less.
This isn’t the result of corporate greed, as Biden and the Democrats claim. It is a predictable outcome of their mismanagement of the supply chain chaos caused by government-imposed economic lockdowns. The latter proved all but useless in ameliorating the effects of COVID-19 but precipitated serious disruptions in the manufacture and delivery of goods and services. The worst possible fiscal policy to pursue during such a precarious supply situation is to artificially increase demand by flooding the economy with borrowed money. Yet, that is precisely what Biden and the Democrats did last March with their $1.9 trillion “American Rescue Plan.” Soon, we had too many dollars chasing after too few goods and, voilà, runaway inflation.
By July, inflation had risen to 5.4 percent, but Biden assured Americans that the increase was only “temporary.” When inflation hit 6.8 percent in November he claimed, “Americans have more money in their pockets than this time last year.” Even after last Thursday’s BLS report, Biden and the Democrats seem to have made no connection between profligate spending and the rising inflation rate. Indeed, they believe the solution is more spending. Congressional Democrats insist that their huge Build Back Better Act (BBB) will somehow reduce inflation, a claim Biden echoed on Friday. This bilge failed to convince Sen. Joe Manchin (D-W.Va.), whose vote they must have to pass BBB, and he promptly issued the following statement:
Congress and the Administration must proceed with caution before adding more fuel to an economy already on fire. As inflation and our $30 trillion in national debt continue a historic climb, only in Washington, DC do people seem to think that spending trillions more of taxpayers’ money will cure our problems.… It’s time we start acting like stewards of our economy and the money the American people entrust their government with. Now, more than ever, we must remember it is not our money, it’s the American people’s money.
The chances are remote that Biden or the Democratic leadership in Congress will heed Manchin’s advice. Indeed Biden takes umbrage when reporters deign to do their jobs and ask questions about rising prices. Recently, Fox News correspondent Peter Doocy asked him if inflation was a political liability and received the following response: “No, it’s a great asset — more inflation. What a stupid son of a b–ch.” On Thursday NBC’s Lester Holt reminded Biden of his July claim that inflation was temporary and added, “Americans are wondering what your definition of temporary is.” Biden called him a “wise guy,” then maundered incoherently about computer chips and automobiles without ever addressing the main point.
The unfortunate reality is that neither Biden nor his congressional accomplices have any idea how to fix inflation. The only way to get the problem under control is to deprive the Democrats of their congressional majorities next November and send Biden packing in 2024. It is useful to remember that the last time we saw an inflation rate of 7.5 percent, that marked a major decline from the double digit inflation that characterized the last two years of the Carter presidency. Inflation had been climbing for years and only began coming down in 1981, after the Republicans won a Senate majority and Ronald Reagan became president. As the latter might put it: Biden and the Democrats aren’t the solution, they are the problem.
Notice to Readers: The American Spectator and Spectator World are marks used by independent publishing companies that are not affiliated in any way. If you are looking for The Spectator World please click on the following link: https://spectatorworld.com/.