Inflation surged to 6.8% for the year ending in November, the Bureau of Labor Statistics reported this morning. That puts inflation at a 40-year record high.
“Inflation is outpacing increases in household income and weighing heavily on consumer confidence, which is at a decade low. It is only a matter of time before it impacts consumer spending in a material way," Bankrate chief financial analyst Greg McBride told the Washington Examiner.
Over half of voters already blame President Joe Biden for record-high inflation, even as Biden pushes to add another $791 billion to federal deficits in the next five years.
But is Biden really to blame for the inflation we’re all suffering from?
President Barack Obama’s top economic aides say yes.
Back in February, before Biden’s first trillion-dollar spending law was passed by Congress, National Economic Council Director Larry Summers warned: “Macroeconomic stimulus on a scale closer to World War II levels than normal recession levels will set off inflationary pressures of a kind we have not seen in a generation, with consequences for the value of the dollar and financial stability. … Stimulus measures of the magnitude contemplated are steps into the unknown.”
More recently, Obama’s Council of Economic Advisers Chairman Jason Furman told The New Yorker, “By March of 2021, it looked very likely that the vaccinations were going to be very effective in bringing COVID down, and that the economy was repairing rapidly. So, that last round of checks, I thought at the time, was a mistake.”
“There were also other parts of the rescue plan that were oversized,” Furman said. “For example, states and localities got a huge amount of money, even though they basically had no fiscal problem by the time the bill passed. It was clear by the time it passed that their tax revenue had recovered and that they’d got enough other aid that they covered their holes. Why does that matter for inflation? Well, you have states across the country cutting taxes now, so you have another round of upward pressure on demand and inflation happening because of that big fiscal relief.”
And last month, Obama auto bailout czar Steve Rattner wrote, “The original sin was the $1.9 trillion American Rescue Plan, passed in March. The bill — almost completely unfunded — sought to counter the effects of the Covid pandemic by focusing on demand-side stimulus rather than on investment. That has contributed materially to today’s inflation levels.”
So, yes, Biden is absolutely to blame for the record-high inflation. The best thing he could do to try and stop it is to stop digging. Stop spending more money, and stop adding to our nation’s federal deficits.