Democrats Own Today’s Runaway Inflation

Democrats Own Today’s Runaway Inflation

– By Howard Sierer –

Joe Manchin saw it coming.

The Democratic senator from West Virginia told fellow Democrats in July that he couldn’t support their proposed $3.5 trillion Build Back Better legislation. His reason: inflation had flared up in June to 5.4% year-over-year, two months after Democrats had enacted their $1.9 trillion so-called  “American Rescue Plan,” and he knew that more spending could only make inflation worse.

True to form, Pres. Biden and Democratic congressional leaders ignored him, assuming they could roll him for his vote when push came to shove. But paraphrasing a famous Dr. Seuss line, Sen. Manchin “meant what he said and he said what he meant. He was true to his word one hundred percent.” He voted “no” when the BBB legislation came to the floor in December.

Unlike the other prominent Joe in today’s politics, Joe Biden, Manchin hasn’t pulled a bait and switch by running as a moderate then morphing into a progressive when it was politically convenient.

Manchin’s July warning was prescient: inflation has run above 5% for eight straight months now with January’s cost of living 7.5% higher than a year ago. Reacting to this latest report, Manchin tweeted, “For months, I have been ringing the alarm bell about inflation….As inflation and our $30 trillion in national debt continue a historic climb, only in Washington, DC do people seem to think that spending trillions more of taxpayers’ money will cure our problems, let alone inflation.”

Nobel-prizewinning economist Milton Friedman made a famous statement that’s applies in spades today: “Inflation is always and everywhere a monetary phenomenon, in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.”

Biden and Congressional Democrats validated Friedman’s statement by passing their $1.9 trillion giveaway in March 2021. Their ostensible reason: to help a faltering economy when in fact, the country’s GDP had been growing robustly since April 2020 and had passed its old high by that March. As a result, Democrats have punished the country with its highest inflation in 40 years.

Some $400 billion of their funding was doled out immediately to individuals regardless of need at a time when household balance sheets already were the strongest of all time as a result of previous COVID relief legislation. The law also added $300 per week to existing unemployment benefits resulting in many whose unemployment benefits exceeded their previous incomes. Unsurprisingly, these folks declined to return to work.

Another unneeded $350 billion was sprinkled on states supposedly to “bridge budget shortfalls.” All states today are trying to decide how to spend their resulting budget surpluses. Utah’s legislature just cut its income tax rates.

Alexis de Tocqueville’s observation about America’s democracy comes to mind: “The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.”

Pres. Biden is one of those who, against all reason and common sense, seems to think that even more spending will somehow reduce inflation. Earlier this month while touting his revised $2 trillion spending plan, he said “Inflation is up. It’s up. And coming from a family when the price of gas went up, you felt it … it matters. But the fact is that if we were able to do the things I’m talking about here, it will bring down the cost for average families.”

As evidenced by this nonsense, Biden doesn’t have a plan for dealing with inflation beyond more spending. Neither do congressional Democrats. Flailing around looking for scapegoats, they’ve ignored their own White House economists, instead blaming “greedy corporations” and supply chain bottlenecks, when, as Milton Friedman explained, they should be looking in the mirror.

While Democrats are equivocating, Republicans have been consistent in highlighting inflation’s dangers and pointing their fingers at Democrats. Republicans supported COVID relief bills in 2020 that called for $3.8 trillion in spending. But the unneeded March 2021 spending blowout passed on strict party lines: every congressional Democrat voted in favor; all Republicans voted against.

Wages are up, especially for lower income workers, but not enough to overcome the last year’s inflation. Per the Bureau of Labor Statistics, real average hourly earnings decreased 1.7 percent from January 2021 to January 2022 giving Republicans a potent election issue felt in every household in the land.

The leftwing New York Times sees inflation as a danger to Democratic control of Congress, saying in a recent article, “If Democrats lose control of Congress in November, it seems safe to say that inflation will be a major reason for their defeat.”

Expect Republicans to hang the inflation albatross around Democratic necks come this fall. While Biden’s numerous failures will sour voters on Democrats in general, no incumbent congressional Democrat can avoid personal responsibility for creating the inflation that is wreaking havoc for all Americans.