President Biden recently gave a speech in which he outlined his plans to combat rising inflation. Below are the major elements in his plan.
The interesting common denominator among these items is that Biden assumes absolutely no blame for inflation. He is going to ride in on his dragon and save the damsel in distress.
The other thing to note is his preference for an approach that makes no economic sense. There are remedies that make more sense.
The first three items (below see Major Elements of Biden's Plan) focus on his government working with other governments to intercede into petroleum and gas markets. It’s as if the people who manage those commodities suddenly decided to gouge the world.
There is little understanding of the economics of those markets by Biden and he doesn’t explain to us what will happen when the government waddles into something it really doesn’t understand.
In his speech he says nothing – nada – about what factors are part of the supply chains of the items he intends to control. Does he really know enough to not screw up those supply chains?Does he explain whose ox is going to get gored as the heavy hand of government intercedes in complicated markets?
As for “giving the Fed more room to fight inflation,” that is the biggest piece of misinformation (malarky) in the speech.
The Fed gets more room to fight inflation when the government takes its foot off the pedal. When the government instead spends huge amounts – that puts pressure on the Fed to monetize that debt. Monetary policy is much affected by government fiscal policy. If the Fed puts on the monetary brakes while Biden’s friends slam down the spending accelerator – it is not going to be a pretty picture.
That's about it. It might sound good to Biden to point his boney finger of blame at providers of oil, gas, healthcare and a few other sectors. But the country would do better if he would look in the mirror and ask himself why he is unable to put a lid on government spending.
Major Elements of Biden's Plan to Reduce Inflation
Release more oil from reserve
Put cap on the price of Russian Oil
Translate lower oil prices into lower gas prices
Work with Congress to reduce everyday expenses for drugs, utilities, and health insurance
Stop Republicans from reducing Social Security and Medicare – and from raising taxes generally.
Give the Fed the room it needs to combat inflation.
Dear LSD. The kuntry wud almost do better if sleepy, creepy, bumbln, fumbl’n, fall'n, lying, cry’n, plageriz’n, basement-dwell’n Biden wud resign. I say almost because his replacement would be even more politically and economically destructive. His Cabinet/adm has no biz experience that wud qualify to manage the economy much less a lemonade stand.
ReplyDeleteUnfortunately, unless Rs take control of the House/Senate with veto-proof majorities feeble, feckless, flaccid Biden will drive the economy/kuntry unrecoverably into the proverbial ditch.
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