Thank Biden for inflation this holiday season
Washington Examiner
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For your peace of mind, don’t compare the price of Thanksgiving dinner this year to what it cost you before Bidenflation. For the sake of your household’s fiscal health, you had better recalibrate your Christmas gift budget before beginning your Black Friday shopping.
As an exercise in accountability, we should recall what has made prices increase by 17.6% in the less than three years since President Joe Biden took office. Although down from its recent peak of 9.1% per year, inflation is still too high: The consumer price index is 3.2% higher than a year ago, which is faster inflation than we saw at any time in the Trump presidency and almost any time during the Obama administration.
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Where did Bidenflation come from? High inflation is not a natural force, like a thunderstorm, which rolls in from time to time uninvited. It also wasn’t an inevitable consequence of the pandemic. High inflation during the last 33 months is the direct and totally predictable consequence of Democrats’ recklessness in 2021.
Acting with disregard for economic facts and motivated by raw politics, Democrats passed the ill-named American Rescue Plan upon taking power. This $1.9 trillion in federal spending didn’t rescue America from anything. What it did was give Biden a way to claim he saved the economy from COVID-19 and former President Donald Trump.
Congress and Trump had already spent trillions of dollars to prop up the economy in the uncertain early months of the pandemic. When governments were forcing businesses to close, it made sense to offer them extra support and protect their employees with the Paycheck Protection Program. We also believed state and local governments would lose tax revenue and incur massive costs in battling the virus.
Within months, it was realized that much of the money was not needed, particularly the aid to states. But overspending in early 2020 was an understandable mistake.
Biden’s overspending, on the other hand, is not. It wasn’t a result of rush or panic but of cynical political calculation — the American Rescue Plan petty politics outranking economic sense.
Biden and congressional Democrats saw that the spending of 2020 won them praise from mayors, lobbyists, special-interest groups, and newspaper editorial boards, and so they kept the party going.
Biden’s case for election in 2020 was also that he would save the economy. But it didn’t need saving. Businesses had stayed open through the lockdowns, and vaccines were developed that helped end the pandemic. States and cities were flush with cash. There was no rescue needed from Uncle Sam to pour gasoline on the inflationary fire that was kindling.
If Biden had admitted as much, it would concede that the centerpiece of his campaign was a load of malarkey. Democrats were physically incapable of admitting, even tacitly, that something had gone right under the ousted administration.
Finally, the American Rescue Plan gave the left end of the Democratic Party an opportunity to try more socialism. As Democrats like to say, every crisis is an opportunity to expand government in ways that would otherwise not fly.
All this unneeded spending flooded the economy with dollars. If you increase the supply of money without increasing services and goods, you have more money but no more stuff to buy. Supply and demand dictate that prices will rise. Presto, you get inflation!
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Crucially, the Federal Reserve accommodated this flood of cash by holding interest rates low through Biden’s first year.
It’s simple. Biden and his party had political goals. They didn’t care what they did to the economy. This week, as you look at your expenses, you’ll know that Biden deserves all your “thanks.”