Four-decade-high inflation continues to batter household budgets disproportionately hurting the poor, elderly, and minorities. According to new inflation numbers, prices rose 8.2% in September from one year prior. While that’s a bit slower than the previous two months, it’s four times as high as the inflation rate when President Biden took office.
Rising inflation didn’t appear out of thin air. Something happened about 18 months ago and now the White House is admitting what that something is: Biden’s own economic policies.
During a press conference yesterday, Press Secretary Karine Jean-Pierre was asked about the start of inflation and accidentally made an admission. Jean-Pierre said what we’ve been saying all along.
White House reporter: “18 months ago when the president took office, inflation and gas prices started rising then.”
Before he could get another word in, Jean-Pierre cut in: “Well 18 months ago, the president signed the American Rescue Plan, more than well back in April of 2021…”
Bingo! KJP gets the prize.
Connect the dots
For years, U.S. inflation has hovered around the Federal Reserve’s target rate of about 2%. Then it took off after Biden’s signature plan, the American Rescue Plan, was passed in March of 2021 and cash started to flow out of Washington. The Federal Reserve Bank of San Francisco confirmed this observation.
Common sense and economics 101 tells us that when government floods the market with cash and liquidity (i.e. stimulus checks, boosted unemployment benefits, child tax credit payments, expanded welfare benefits and moratoriums on student loans and rent) households will have a lot of cash to spend and they will want to spend it all at once.
This cash was distributed just as pandemic measures were lifted allowing businesses to ramp up, travel to resume, and delayed events to occur. Yet, the cash was a disincentive to work, because there were no work obligations, leaving too few workers to help producers meet consumer demand. As a result, businesses have increased prices as they deal with rising costs and passed those along to workers. KJP just connected the dots between Biden’s harmful economic policies and inflation.
Inflation’s impact is not just felt at the supermarket but in the bank account of workers.
Real wages–or wage-adjusted wages–flipped from significantly outpacing inflation to being outrun by inflation just after the American Rescue Plan was passed.
President Biden and officials have downplayed, diminished, and distanced themselves from inflation. Many of us have called out the reckless fiscal policies of the Biden administration as the direct reason for today’s high inflation. It’s nice to know that the White House Press Secretary admits it.