We won't put inflation behind us as long as Joe Biden is President and Democrats control one or both Houses of Congress. There was going to be some level of inflation after the shutdowns of 2020, but the policies adopted by the Biden Administration and the spending bills passed by the Democrat Congress have elevated inflation to levels they have not been at in many years. As long as Joe Biden is in the White House or Democrats control one House of Congress they will be able to prevent undoing the policies that have put us where we are.
Starting on day one, the Biden Administration began adopting policies that fueled the growth of inflation. Despite it being obvious for months that inflation was running hotter than expected the Biden Administration was in denial, saying inflation was transitory.
Supply chain issues were initially caused by other factors but the Biden Administration has talked about addressing this but none of their policies have been successful. On the other hand there are areas where the Biden Administration and Democrat Congress have taken action and these actions have resulted in the highest inflation in 31 years.
The Biden Administration adopted policies their first month in office to curtail oil production in the U.S. and almost immediately oil prices started rising. Labor costs are higher because of policies that encouraged people not to come to work, including the adoption of the America Rescue Plan, with a $1.9 trillion dollar price tag, with cash giveaways and continued higher unemployment payments. Those costs and staff shortages aren't going to get any better as the Biden Administration along with Democrat run States and Local Governments try to require workers to be vaccinated or be fired.
Government deficit spending has traditionally been viewed as a contributor to inflation and the Democrats have taken that to a new level this year. First they passed the America Rescue Plan mentioned earlier. Then the President just signed a $1.2 trillion bipartisan infrastructure bill, which was supposed to be a compromise alternative to the "Build Back Better Plan" not in addition to that plan. And now Congress is considering that Build Back Better Plan which, when the budget gimmicks are factored out, will dramatically increase the federal deficit while imposing new taxes and regulations that will negatively affect the economy.
Last but certainly not least is the continued looting that is occurring in big cities across America. Many videos are available of people brazenly walking into stores and filling bags or luggage with products and walking out. This activity is a direct result of Democrat run cities and Democrat District Attorneys defunding police and de-criminalizing such crimes. Theft has long been known to contribute to rising prices and now it's leading to stores closing in some urban areas.
Anyone who is saying inflation will go away next year are wrong. Let's look at the factors listed above and consider what the Democrats and the Biden Administration are doing about them.
- Nothing the Biden Administration or the Democrat governments in California have done to ease the backlog of ships off the California coast has worked.
- Regarding high oil prices, the Biden Administration steadfastly has refused to relax measures impacting domestic production. They have asked OPEC to increase production but OPEC refused. It seems the fallback position is to blame oil companies and ask for an FTC investigation.
- Labor costs - surely with the end of the incentives for people not to work that problem will ease right? Wrong. The Biden Administration and Democrat led States and Cities are not backing down on vaccine mandates that will continue the labor shortages driving higher costs. Furthermore, the Build Back Better Plan could also contribute to the labor shortage as the provisions relating to child care will drive costs up and to be eligible for Government subsidies a dual income couple will probably need to have one of the spouses stop working to get their income to the required levels.
- Deficit spending and its contribution to higher costs will increase with the bills already passed and will only get worse if the Build Back Better Plan passes.
- Then there is looting. This past weekend a mob ransacked stores in cities across America. Local Democrat officials apparently aren't able or willing to stop this and Biden Administration has offered no comments or suggestions on how to address this.
Until that happens, expect inflation to remain with us.
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