President Joe Biden has spent three and a half years buying votes with your money. Your taxes may not have gone up, because Biden hasn’t financed his spending with federal revenues so much as with money created out of thin air — which is to say, the cost of Biden’s spending spree has been rampant inflation which is still too high and not getting better.
Prices were 3.5% higher last month than they were a year earlier. A 3.5% annual inflation is a lot better than the 9% gut punch delivered by Biden a couple of years ago. But it’s still too high. Janet Yellen, former Federal Reserve chairwoman and Biden’s Treasury Secretary, established 2% long ago as the optimal inflation rate.
But inflation is rising again; February’s year-over-year figure was 3.2%.
Presidents are credited or blamed for the economy whether they deserve it or not, but in this case, Biden has exclusive rights to the blame. His obscene overspending is the root cause of our woes, and he wants to keep it coming.
Once the pandemic hit, it was almost inevitable that inflation would increase. Congress passed massive bipartisan aid packages that ranged from helpful (the Paycheck Protection Program) to misguided (massive piles of cash to local governments) to indefensible boondoggles (airline bailouts).
These were all responses to the lockdowns, which knocked tens of millions of people out of work. More money chasing less productivity is the recipe for inflation. There were fewer goods and services to purchase, but people, companies, and local governments all had more cash to spend.
Much of the 2020 spending seemed necessary or was an excusable overreaction to an unprecedented pandemic. But Biden had campaigned on what liberals always campaign on: Spending massively more to pay bribes to voters and special interest groups.
The Democratic Congress gave Biden the $1.9 trillion American rescue plan, a spending binge unconnected to productive activity that simply drove up prices.
You might have expected Biden to learn a lesson from this folly, but instead, he just got hooked more firmly on cronyism because people like receiving money for what seems like nothing. It never is, of course; the price is inflation.
Biden followed his ARP with the misnamed “Inflation Reduction Act,” which gave another $800 billion to Democrats’ friends. Since then, the president has fought to forgive student debt, another giveaway to the rich which would, again, load the cost on the working man.
When graduates with degrees from expensive colleges have more money to spend, but the working class gets no benefit, the result is inflation that disproportionately harms the working class.
So how can Biden and Congress address this growing and too-high inflation? One problem is that sucking money out of the economy through tax increases would be a cure worse than the disease. So the first step is to stop giveaways, cut spending, cut corporate welfare, and stop forgiving student debt.
The second step is to increase productivity. That mostly means freeing energy production and rolling back regulations.
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One area of particularly gnarly price increases is in car repair and car insurance. The rise of electric vehicles (subsidized and pushed by Uncle Sam) and the tangle of regulations have exacerbated price pain. Deregulation would help, as would taking the foot off the EV accelerator.
High inflation is Biden’s fault. Voters should hold him to account. Congress should take some simple steps to treat our economic illness.