The President Biden administration is taking a hit in the polls for a number of reasons – inflation is one of them. The inflation rate of 6.8 percent is higher than any time since June of 1982. Even worse, the calculated rate on what are called “essentials” – the rate that impacts on the poor and the middle-class the most — is passing the 10 percent mark.
No amount of political jawboning can change what the public feels in their pocketbook, but Biden & Co. are going to try anyway. They have their own unique theories of inflation.
To sell their ass-covering theory, Democrats are saying that the inflation is CAUSED by businesses raising prices – the fuel industry, retailers, car dealers and your local mom and pop bakery. In fact, the increase in prices is the RESULT of inflation. What CAUSES inflation, is too much money chasing too few goods – too much government spending and too much money given out to stimulate an overly stimulated economy.
Senator Elizabeth Warren claimed that inflation is caused by grocery stores raising their prices. She should know better – and probably does. White House Press Secretary Jen Psaki said that the inflation is being caused by the “meat conglomerates” “jacking up prices.” She should know better, and probably does.
In a totally unique economic theory – one not embraced by ANY economist I can find – Biden argues that the inflation is being caused by the entire world of commerce and professional services suddenly raising the prices of everything. Warren, Psaki and the Democrats in general seem to be ignorant that having more dollars to purchase fewer items automatically increases the cost of goods across the board. That is inflation.
Since Democrats already reject the FACT that printing more and more money – and pushing it into the economy – causes inflation, it is a small step to claim that giving the people more money fights inflation.
According to Biden, the trillions of dollars he wants to give people will help them cover the cost of inflationary price increases. That may sound like a good idea – but if you like it, you are being flimflammed by Biden. If the problem is too much money chasing too few goods, more money poured into the economy will only accelerate the inflation. It is a bit like the proverbial squirrel chasing its own tail.
Biden also claims that his Build Back Better program would actually reduce inflation. Since it is impossible to rationally understand that claim, it is probably just a big political whopper.
It can be argued that IF all the goodies in the BBB program were totally offset by new revenues, it might be inflation neutral. But if it results in deficit spending and more piled onto the National Debt, it will accelerate inflation.
Biden emphatically claims that the $1.9 trillion in new spending was to be paid for with new revenues, Biden is telling another whopper. The Congressional Budget Office had scored the BBB legislation as producing a $380 billion shortfall – and that is if you believe the $1.9 trillion price tag.
The most promising news in the battle against inflation is the probability that BBB is now dead. It will not pass the Senate. At least that is the likely outcome since West Virginia Senator Joe Manchin has declared himself a “no” on the BBB bill.
So, there ‘tis.