Economists are increasingly concerned about the inflation threatened by Biden’s reckless spending plans – many of which come from the socialist misconceptions of Bernie Sanders and people like him. Inflation is the phenomenon where the consumer can buy less and less with a single dollar. I am old enough to remember when I could buy a candy bar for $0.25. The same candy bar today costs over $2.00. That price increase over time reflects inflation.
When I was young my father bought a very middle class house for $22,000. Today a comparable house would be over $350,000. That too is inflation. When I was a student, in the 80s, a semester of college cost approximately $4,000, now it is over $30,000. That is inflation.
Inflation is a tax on everyone. The higher the rate of inflation, the weaker and weaker the dollar becomes, and the less we can all afford to buy. Inflation also wipes out middle class wage increases. If a worker’s wages go up 3% in a year, but inflation on most goods goes up 6% in that same year, the worker is actually losing ground in his ability to pay for his family despite the wage increase.
Throughout the Trump presidency, inflation hovered somewhere around 2.0%. Again, that means a dollar in your pocket would be worth 2% less next year than it was this year. Now, under the Biden-Bernie economy, the inflation rate has hit approximately 5.4%. That means the value of all of your dollars are plummeting at more than double the rate they did under Trump. If you have significant amounts of money in a savings account, you are losing real money value every day. So, what is causing this Biden-Bernie inflation?
Many things can cause inflation, but three things are largely at work causing inflation in the Biden economy. First, the liberal democrats (socialists) are trying to buy influence and power by handing out boat loads of free money. Trillions of dollars are being distributed by the federal government in the form of COVID payments, rent forgiveness (properly called rent stealing), falsely named tax rebates paid to people who don’t pay federal income taxes, business loans, extended and increased unemployment benefits, and other types of welfare payments. Incidentally, there are no work requirements for all this supposedly free money, which ultimately has to be paid by those taxpayers that are working hard, rather than sitting home on their couches. All these trillions of dollars will eventually have to be paid back by the minority of Americans who pay more in taxes than they receive in benefits and who work all their lives not to be dependent on the federal government. In the meantime, the millions of people collecting government benefits they did not pay for or earn have lots and lots of money to spend that they should not have in a normal economy. You should know you are being taxed to pay for it all. In spending all that free money, these benefits recipients drive the prices of everything up from hamburgers to cheese to cleaning products to used cars, and so on. The federal government is giving your nonworking neighbors free money so they can buy things at your expense, creating a scenario in which too much free money is washing through the system, driving up prices.
Second the Biden’s energy policies are also driving up inflation. Under Trump the country was energy independent. In other words, the US was a net exporter of energy products and services. America was able to rely on its own energy exploration and production to power its expanding economy. Remarkably, Trump also cut the amount of greenhouse gas emissions in the atmosphere by approximately 2.1% because American natural gas is so clean compared to other fossil fuels.
In contrast, although America is not even close to being able to run on wind, solar, and hydropower – not even close – Biden came into office at war with fossil fuel production – killing pipe lines, reducing leases, and threatening industries. As a result of Biden’s almost insane energy policies, and his apparent seduction by far left environmental halfwits, gasoline prices have increased 40% during his first few months in office. Regular, hard working Americans pay those rocketing gas prices. Airlines pay them. Soccer moms pay them. Truck drivers pay them. Everyone pays them, except the government elites, like Biden, and Obama who do not have to pay their own living expenses. This is inflation. Moreover, when the price of driving trucks across the country, flying planes across the sky, and sending ships across the ocean, all increase because of burgeoning fuel costs, the prices of all other goods driven by such transport go up. Everything so transported becomes more expensive to buy. This is also inflation.
Third, and finally, Biden’s policies are causing inflation by encouraging workers not to work. If inflation reflects too much money chasing too few goods and services, then one way to reduce inflation is to produce more goods and services. For example, one reason houses outside our major crime ridden cities have become so expensive is that not enough houses are being built. If we could build significantly more houses, the price of houses would go down. Inflation would decrease. But to produce more goods and services, you need more Americans to work. Right now there are 10 million jobs that have not been filled by American workers. One reason the jobs have not been filled is that many workers are not working because of the extended unemployment benefits. As they spend the free money the government has given them, following the COVID pandemic some of those people don’t want to go back to work until the free money runs out. The taxpayer is essentially giving these workers a long paid vacation they did not earn. Data are available showing that as various sources of free money are drying up, such as an end to bonus unemployment benefits, people are returning to work and the unemployment rate is going down. Although anyone could have predicted this, some people fane surprise when they learn that when you pay people to stay at home, they will stay home. Apparently, some Americans are perfectly willing to enjoy lifestyles they never earned. This too creates inflation because the idled American are not producing any goods and services. They are sitting on the couch.
Fortunately, Biden and Sanders have a plan. Their plan is to spend vastly more money (trillions) in free giveaways than has ever been spent in the history of the world. There is no limit to how much they want to spend. They want to take trillions of dollars from the people who earn the money and give it to people who did not earn the money. Their solution to too much money chasing too few goods is to vastly increase the amount of free money and benefits, while crippling the economy so fewer goods are produced in the US. These are the policies that will dramatically increase inflation, making everyone’s savings worth a lot less. When asked how these destructive policies could possibly solve inflation, Biden just stammers incoherently. For his part, Bernie Sanders has been heard to quip, “bread lines are a good thing.” That is fortunate because with these policies we will all meet in the bread lines soon, just as happened in Venezuela.
By Paul H. Beattie
Notes from the Secular Right 