How Biden's spending explosion sparked an inflation crisis
Now that the election has ended successfully, we are finally able to Inflation hurts the economy, hampering Joe Biden's presidency And it swept Kamala Harris's bid to become the 47th president.
of wall street journal on sunday night published Works by Nick Timiraosthe paper's chief economics correspondent and the nation's leading Fed interpreter. Mr. Timiraos is the Fed's main conduit for indirect communication with investors and the public. journal's top economic news reporters are important to understand the impact of this article.
The title of the article is “How did the Democratic Party defeat inflation?”.“ The subheading further explains:[i]In an attempt to avoid the mistakes made after the 2008-2009 financial crisis, officials made new mistakes that led to political defeats. ” In other words, the article lays inflation and its political consequences, the Republican landslide victory in recent elections, at the feet of Biden and the Democrats.
The story begins exactly where it should begin. Our decision is to move forward with this immediately. Huge $1.9 trillion spending bill misleading name american rescue plan. As we have frequently argued at Breitbart Business Digest, this will push the U.S. economy from perhaps mild inflation due to supply chain disruptions caused by the pandemic to the full-blown crisis we have experienced. It was an important step for
I saw it coming in 2021.
We've been covering this for years. Already in September 2022, we are seeing that the massive and unnecessary fiscal expansion in Biden's first year in office has significantly boosted demand and pushed the economy toward the worst inflation in 40 years. “I put it on the right track,'' he wrote. As of spring 2021, we were warning that inflation was rising rapidly And it is likely to strain the economic health of low-income Americans.
“The first two months of President Joe Biden’s presidency have not been particularly good for Black, poor, and working-class Americans,” we explained on April 9, 2021.
The sudden development of inflation is explained as follows.
In Ernest Hemingway's 1926 novel the sun will rise againa character is asked how he became bankrupt. “There are two ways,” the man answered, “gradually and suddenly.” Some of this can be seen in Friday's Producer Price Index figures, which showed prices rose more than twice as much as expected month-on-month in March. Compared to February, prices rose 1%, faster than expected by four-tenths of a percentage point.
On an annual basis, the numbers become even more impressive. Annual inflation rose to 4.2%, the highest since September 2011. Of course, 2020 has been a crazy year and the traffic lights are a little crazy. Last year, we went into a forced lockdown in March, with businesses closed and people advised that touching cereal boxes could expose them to the deadly Chinese plague. Prices fell in February and March. As a result, year-over-year increases overstate how much inflation is actually occurring.
However, although economists were well aware that this so-called “base effect” would occur well into the month, they still underestimated inflationary pressures. Fed Chairman Jerome Powell has asserted that any rise in inflation is likely to be “temporary,” but if economists have missed the size of the rise, it is unclear whether they have accurately determined the duration of the rise. How confident are you that you can predict it?
Price increases were particularly concentrated in energy and food. Gasoline prices rose 8.8% in March, more than 50% higher than a year ago, when prices were stagnant as people stayed at home. Food prices increased by 0.5 points compared to February, and by 5.1% compared to the previous year.
For families at the bottom of the income ladder, food and transportation make up a much higher proportion of household spending than for families at the top. Therefore, the inflation we are experiencing is hitting the poor and working class especially hard. Mr. Biden, who has promised to raise taxes only on the wealthy, is leading a regressive stealth tax hike targeting the bottom half of the income bracket.
In April 2021, Breitbart's own jim pinkerton Moreover, he correctly predicted that rising inflation would spell political ruin for the Democratic Party.
Joe Biden was first elected to public office in 1970, the same year Jimmy Carter was elected governor of Georgia. Two years later, in 1972, Biden was elected to the U.S. Senate from Delaware, and four years later, in 1976, Carter was elected president along with Biden. worker bee in his place.
So in the late 1970s, Biden served in the Senate while Carter was in the White House. And in 1980, when Carter was running for re-election, Biden appeared at the Democratic National Convention. praise Carter appears on national television.
In other words, Biden should have a good memory of what life was like during the Carter administration. And we should also remember that Carter was killed in an accident. landslide defeat In 1980, he lost 41 of the 50 states to Ronald Reagan, including Biden's Delaware.
President Jimmy Carter listens to Sen. Joe Biden (D-Delaware) wait to speak at a fundraiser reception in Wilmington, Delaware, on February 20, 1978. (AP Photo/Barry Summa)
[…]
In other words, if there is a new round of inflation, the wealthy will probably be fine and will continue to be wealthy no matter what happens. In reality, the biggest losers are likely to be poorer people, such as those on fixed income pensions or those who keep their funds in checking accounts or under their mattresses.
It seems unnecessary to add that there are more voters with middle and low incomes than those with high incomes. In other words, by expanding the economy, it may be weakening Biden's political standing.
So now we can wonder. If we are to suffer again from inflation like in the 1970s, will today's Democratic Party again suffer from political backlash like in 1980? Will Biden remember that Reagan did Carter a favor? right?
There's no way to know. Still we do Know this, because the wise old man Santayana told us: Those who cannot remember the past are doomed to repeat it.
Of course, the spending explosion was not the Biden administration's original sin. That was almost a necessary follow-up Biden campaign deceptionWhich falsely claimed that the economy was in ruins The Trump administration's mishandling of the pandemic is believed to be the cause. The truth is, no country in the world has dealt with the economic impact of the pandemic so well, and few in history have seen an economic recovery as good as the Trump administration.
Vice President Kamala Harris speaks in Seattle, Washington to commemorate the first anniversary of the Inflation Control Act, August 15, 2023 (Official White House photo: Polly Irungu)
But the Biden administration, which infiltrated the White House with lies. To prevent President Trump from receiving credit for the reconstruction efforts. Even those in the administration who may have actually believed the economy was at risk of collapse in early 2021 were blinded by hatred for Mr. Trump and his aides. In short, deceivers and self-deceivers have united in support of Biden's reckless spending plan.
Surprisingly, some Democrats are already rushing to forget. Even the most recent episode denies that Biden's extraordinary spending has anything to do with inflation or that inflation has anything to do with the election outcome. However, we doubt that a more honest assessment, such as the one Timiraos describes in his report, will be made. journal And what we've been creating for almost four years now will become common wisdom.
