The Federal Reserve Bank (the Fed) and the Biden administration are systematically undermining the stability of the American economy with a variety of unwise and destructive policies. The Fed and the administration defend these policies by denying obvious economic truths, which include their own inflation data.
Treasury Secretary Janet Yellen asserts that inflation is transitory and shortages are temporary. More than 300 American manufacturers have asked the Biden administration to end disruptive tariffs to ease shortages and reduce costs.
Galvanized steel has doubled in price and is only sold on allocation, resulting in severe shortages. Steel in the EU is 40 percent lower in cost, which provides a huge advantage to our EU competitors. The HVAC industry is experiencing the worst inflation since the mid-1970s. Housing is experiencing shortages and inflation.
Yellen also presses Congress to spend more money to aid the economy. She is likely detached from reality, as the Biden administration policies include massive spending up to a $6 trillion budget for fiscal year 2022, which expands deficits to frightening levels. Modern Monetary Theory, which promotes massive government spending and borrowing, has infected the brains of the Biden administration.
We have been justly proud of our energy independence, but now gas prices have increased 50 percent in just a few months. The Biden administration cancelled the Keystone Pipeline and new fracking on federal lands with the intent of ending the production of fossil fuels. It is clear that green energy is inadequate, but President Biden has made climate change his administration’s most important priority. These policies will not help the climate but will cause lower-income citizens to suffer with high energy, food, and housing costs.
Milton Friedman said many years ago that inflation is “too much money chasing after too few goods.” This assertion has been challenged in recent years, but today’s crises provide plenty of evidence for it: witness the massive inflation of the U.S. stock markets, housing, and most all capital goods. Consumer product inflation has been tame, but now the federal government is wiring money to consumers and states while expanding the federal government. This is why we’re seeing shortages, high demands, and inflation.
Jerome Powell is determined to be the worst Fed chair since Arthur F. Burns (1970–78), who created massive inflation with his policies and arrogance. Burns denied hard, factual data, and now Powell is following in his footsteps by doing the following:
The following solutions will be difficult, but necessary, to achieve stable prices and economic growth:
Policymakers are headed to an economic cliff, which will lead to uncontrolled inflation and a recession. The U.S. dollar could lose its reserve status if the market loses confidence in it. If this happens, we’ll learn the hard way: the U.S. will have a lower standard of living, and the federal largesse will cease to exist.
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/.