Biden Delivers ‘Nonsensical Message’ On Inflation

As presidents usually do in their State of the Union addresses, Joe Biden tried his best on Tuesday evening to say the economy is roaring and growing better than ever. However, he could not skirt around the economic issue most pressing to ordinary Americans, inflation.

Biden has now been forced to scrap the narrative that inflation is “transitory,” especially since American dependence on foreign energy and the ongoing crisis sparked by Russia’s invasion of Ukraine is pushing prices higher for everything Americans consume.

Of course, his new explanation for inflation pretends as if the Federal Reserve or his administration have done nothing to cause surging prices. He ignores the effects of $3.6 trillion in new deficit spending in the name of COVID-19 relief, paid for with money created out of thin air. He also ignores the increase in the Fed’s balance sheet to almost $9 trillion since the 2008 financial crisis and the artificially suppressed interest rates that have led to excessive credit and malinvestment throughout the economy.

Biden’s new explanation for inflation focuses on supply chain problems resulting from the production slowdowns during the COVID-19 pandemic. He makes no proposals about reducing government spending or the money supply flooding the market with dollars chasing fewer goods.

Biden proposed more government spending in politicized subsidies or price controls as his fix for price inflation. He identified several industries, including computer chips, climate change firms, electric vehicles and prescription drugs, as candidates for subsidies or fixed pricing.

The administration’s analysis fails to consider the aggravating effects of even more government spending or the change price controls will have on-demand, both of which will only make inflation worse. More expenditure can only be paid for in two ways. The government will have to borrow the money or it will have to raise taxes or both. The combination of even more excessive stimulus spending and the depressing effect of additional tariffs on domestic production will only lead to ever-increasing inflation and lowered production.

In November, Joe Biden tried to pivot on several critical issues to position Democrats for the upcoming midterm elections. He appeared to double-down on inflation, however. Voters are likely to make Democrats pay the price for the excuses coming from the White House as every indicator points toward even greater inflation.