Yesterday the Bureau of
Labor Statistics reported that inflation in the US climbed to
its highest level in 40 years in January, causing prices to rise by 7.5% from
a year ago.
Joe Biden has once again led the US into unchartered
catastrophes due to his ignorance about the fundamentals of economics.
When Biden occupied the White House in January
2021, President Trump gifted him an inflation rate of just 1.6%. This was
when Covid-19 restrictions were still imposed causing businesses to either be
closed or operate with restrictions. The current numbers are more troubling
considering restrictions across the US have been eased.
To sum it up, in just one year, Biden managed to increase the
overall prices by almost five times.
But beyond the figures and statistics what really matters is
the causes, impact, and potential solutions
We first look at the potential causes.
The primary contributing factors to inflation are a vast increase in the money supply through the Federal Reserve's purchase of federal debt instruments issued to cover deficit spending, soaring demands, and supply-chain crisis.
Driving the supply chain crisis are high transportation costs
and labor shortage.
The reduction in the workforce has been caused by Covid-19,
anti-vaccine/mask mandates sentiments, the closure of schools that compels parents to stay home,
and Covid19 unemployment benefits surpassing potential wages.
The Canadian trucker border blockade against the vaccine
mandate will impact the transportation of goods and worsen the supply chain
crisis. The movement could inspire US workers to conduct similar protests
which will worsen the labor crisis.
Also connected to inflation is the price of energy.
Back in January 2021, Biden shut down the Keystone pipeline and
imposed numerous restrictions on fracking. This ended US energy independence that
was founded by President Trump and was one of the contributing factors for the US
energy crisis.
The price of fuel has an impact on the prices because the price of any consumer item includes the price of
transportation.
Biden also waived
off sanctions on Nord Stream II, Russia's state-owned
energy company subsidiary which increased European dependence on Russian
gas. A war over Ukraine or sanctions on Russia will cause an energy shortage resulting in global
gas prices skyrocketing. Rumblings of war are already caused gas prices to rise.
The massive
influx of unskilled and uneducated illegal immigrants also
means there are more mouths to feed while the supply remains as is. The fact
that they may not have the means to pay will only cause more government
spending.
We now look at the impact of inflation
The price
of gas rose by an emphatic 40%. According to
the Poynter Institute, the average price of gas under President Trump was $2.50
per gallon however under Biden the average price rose to $3.47 per gallon.
In 2021, US
vehicle owners paid $144 million more for gas per day under
Biden than they did under President Trump.
The price
of used cars is now up by 40.5% while the price of new
cars is up by 12.2%. The price of essential
food items such as meat, fish, poultry, and eggs is up by 12.2%
while the price of bread and cereals are up by 6.8%.
The average household spends $250 more per month, on groceries and gas
which makes it over $3000 a year. Consequently, owing to minimal pay-hikes, average
workers lost 1.9% of their take-home pay.
The NY Post interviewed four
middle-class taxpayers who highlighted a rise in the cost of health food items, electric
and gas bills, and even the price of
toilet paper.
To sum it up, every activity such as eating, driving, and central
heating at home saw the highest price spikes in decades resulting in a cut-down purchase
of non-essential items and bulk purchases.
This obviously has contributed to the economic slowdown.
The Democrats frequently claim to be the party of the working class,
the downtrodden, and the persecuted. Their inflation catastrophe has certainly hurt
their base the most.
There were also huge losses in the stock markets as traders
withdrew their investments.
The tech-heavy
Nasdaq Composite slid by 2.1% to 14,185.64, while the S&P
500 shed 1.8% to 4,504.08. The Dow
Jones Industrial Average lost 526.47 points, or 1.47%, to
35,241.59.
Stocks were volatile throughout the day and finished deeply in
the red amid speculations that the Federal Reserve would get more aggressive
with its tightening policy to combat inflation.
How can Biden resolve the inflation crisis?
Firstly, the total removal of mask and vaccine mandates will
bring back the workforce. Secondly, Covid19 welfare payments must be made sparingly only to those in real need.
Thirdly, a resumption of the Keystone pipeline will improve the energy
situation and bring down gas prices. Fourthly, a drastic cut to gratuitous government spending. Finally, a moratorium on irresponsible utterances of war with Russia.
How did the clueless-in-chief Joe Biden respond?
Thankfully he did acknowledge the stress on American families' caused
by inflation but went on to claim the following:
“On higher prices, we have been using every tool at our
disposal, and while today is a reminder that Americans' budgets are being
stretched in ways that create real stress at the kitchen table, there are also
signs that we will make it through this challenge."
A citizen looking towards for hope would be
thoroughly disappointed. There were no specifics to explain the cause or
prescription for a solution but merely ramblings.
Biden’s record isn’t very inspiring, last December he claimed
that the 6.8% inflation through November was the “peak” of
this crisis and matters would improve, but now matters are
much worse.
That disappointment showed in a recent Politico/Morning
Consult poll. The voters ranked the economy as their No. 1
issue. Among these voters, an overwhelming 73% said the US is on the wrong
track under Biden. Biden’s approval rating is below 40% and
is rapidly sinking.
Apart from empty words has there been any reaction from the
Biden administration?
They are still busy repackaging his rejected ideas from Build
Back Better which will increase government spending on intangible
endeavors
They are also making preparations to enter into a gratuitous
war with Russia over the Ukraine border.
In conclusion, the Biden administration is almost like an
obscene parody of a government clueless about how they caused catastrophes and even
more clueless about how to resolve them.
This has even caused skeptics to wonder if it is all being done on purpose to ruin the nation and rebuild it as a welfare state.
Irrespective of the motives This has caused the future of the country to be similar to a kite dancing in a hurricane.
Also appears on American Thinker
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