Biden Continues to Play Inflation Blame Game – Opinion

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Joe Biden, the President of the United States refused to accept any blame for the nation’s worst inflation rate in over 40 years on May 10.

According to Biden, “There are two leading causes of inflation we’re seeing today. First, inflation can be caused by a pandemic that occurs only once every century. … And this year we have a second cause: Mr. Putin’s war in Ukraine.”

Biden did not mention the fact that inflation was below 3 percent throughout the pandemic. Biden was actually only at 2.4% when he entered the Oval Office in late September, long after the worst of the pandemic.

However, since Biden became president and unleashed the federal spending spigot via the $1.9 trillion American Rescue Plan and $1.1 trillion “infrastructure” bill, inflation has consistently increased under his watch.

Indeed, one of the few things Biden said during his inflation speech that passed the smell test was, “Republicans love to attack me as a big spender, as if that’s the reason why inflation has gone up.”

Biden admitted that in mocking tones, however, it’s true.

The current bout of inflation, in reality, is only monetary. This isn’t due to COVID-19’s supply-chain crises fallout. And, it is surely not due to Putin’s invasion of Ukraine.

And, although Biden’s speech on inflation focused mostly on reducing prices, that only addresses the symptoms, not the root of the problem. Inflation was heating up in 1970s and Nixon created the Nixon Shock to stop it.

Unfortunately, it didn’t work. Price controls never do. Economists also believe the Nixon Shock made things worse.

At its most fundamental, inflation is caused by price distortions resulting from the devaluation of the dollar.

While this has been occurring for many decades, primarily ever since the dollar was untethered from the gold standard thanks to Nixon, it has morphed into hyperspeed during Biden’s tenure in the Oval Office.

Biden declared an aggressive war against U.S. oil production. This has led to gas prices and other energy price increases. Because energy is the lifeblood of the economy, one should not overlook the role that high energy prices are playing in today’s inflationary environment.

The price per gallon for gasoline hit an all-time record of $4.40 just this week. The price of diesel fuel, which has reached a new record high at $5.55 per gal.

When one combines massive government spending, enormous money printing via the Federal Reserve, and an administration hellbent on waging war against U.S. energy production, one should expect to create a witch’s brew wrought with inflation.

That is exactly what the Biden administration has done. This is how it works.

There’s a quick fix for inflation in the United States. In order to increase the dollar’s value, first and foremost the federal government needs to rein in its spending and raise interest rates.

The federal government must also adopt common-sense policies that increase economic growth. To start, the U.S. could relax its regulations regarding its energy sector. Lower taxes, which are pro-growth, would help to stimulate the economy and increase innovation. This could also encourage job creation.

According to some, inflation can be defined as too many goods and too little money. If that’s true then less money is better at chasing down more goods and service.

Chris Talgo ([email protected]) The Heartland Institute’s senior editor.