Inflation is a top priority for voters, so President Biden is on the defensive. The president’s latest attempt to put a spin on surging prices comes via a new Wall Street Journal op-ed he published over the weekend, outlining his ‘plan for fighting inflation’ for Americans.
Here are three glaring problems with Biden’s supposed solutions.
1. Completely Ignores the Real Root Cause of Inflation
While many factors influence price levels, rampant money-printing by America’s central bank, the Federal Reserve, has played the biggest part in our ongoing inflation spiral. As I’ve previously explained, the Fed created trillions of new dollars out of thin air to “stimulate” the economy during the pandemic. The inevitable result was that the dollars in circulation lost value and prices rose.
The Federal Reserve has created trillions of new dollars out of thin air since the pandemic began.
That has a LOT more to do with inflation than Vladimir Putin. pic.twitter.com/iKDZLwQNQi
— Brad Polumbo 🇺🇸⚽️🏳️🌈 (@brad_polumbo) April 20, 2022
Rather than address this by scaling back the Federal Reserve, Biden’s supposed plan for fighting inflation is to… keep letting the Fed wreak havoc on our economy?
“First, the Federal Reserve has a primary responsibility to control inflation,” the president writes. “My predecessor demeaned the Fed, and past presidents have sought to influence its decisions inappropriately during periods of elevated inflation. I won’t do this. I have appointed highly qualified people from both parties to lead that institution. I agree with their assessment that fighting inflation is our top economic challenge right now.”
So his plan is to… do nothing? While the Fed is supposedly independent and not under Biden’s direct control, he has bizarrely appointed central bank officials who reject the principles of sound money and instead embrace the same money-printing philosophy that got us into this mess in the first place. He even renominated Jerome Powell, the Fed chair who oversaw this calamity over the last few years. (Talk about failing up?)
As a result, Biden’s plan does nothing to rein in our reckless monetary policy.
The most important thing we can do now to transition from rapid recovery to stable, steady growth is to bring inflation down. That is why I have made tackling inflation my top economic priority. My plan has three parts — read more about them here: https://t.co/5IUu0qbCaa
— President Biden (@POTUS) May 31, 2022
2. Actually Calls for MORE Government Spending and Intervention
“Second, we need to take every practical step to make things more affordable for families during this moment of economic uncertainty—and to boost the productive capacity of our economy over time,” Biden writes.
The president goes on to call for more government spending on energy subsidies, childcare, housing, healthcare, and more, because these are the areas seeing the biggest price increases. He also calls for a variety of regulations, price caps, and other forms of government intervention in these sectors.
The irony here is really quite something. Housing, healthcare, and energy are already some of the most highly regulated and subsidized industries in America. They’re expensive and rising in costs not despite these efforts, but partly because of them.
That’s right: Biden’s “plan for fighting inflation” only doubles down on the failed big-government economics that got us into this mess in the first place.
3. Gaslights Americans About ‘Reducing the Deficit’
Biden’s third suggestion for reducing the deficit is actually on the right track.
“Third, we need to keep reducing the federal deficit, which will help ease price pressures,” the president writes.
The problem? Biden’s policies since taking office have made our budget woes much worse, not better, and his attempt to take credit for deficit reduction is gaslighting at its worst. As Jon Miltimore and I explained for National Review:
“In its first year in office, the Biden administration did indeed bring [the] deficit ‘down’—to $2.8 trillion, a deficit still nearly triple that of 2019 and the second largest in history. In fact, a Congressional Budget Office analysis concluded that the federal deficit would have fallen more than twice as fast—a decline of more than $870 billion—if the White House had not implemented new spending programs. Adding to the absurdity of Biden’s claim is that he would have spent even more if he could have.”
Biden is right that our enormous, multi-trillion-dollar budget deficits have contributed to inflation. But it’s bizarre for him to claim the mantle of deficit reduction when his policies have made things much worse, not better. And there’s zero credibility behind his promises to further lower the deficit while also pushing trillions more in new government spending. If the deficit continues to decline, it will almost certainly be in spite of President Biden, not because of him.
Biden’s ‘Plan’ is All Buzzwords, Zero Backbone
At the end of his op-ed, President Biden says that he “will work with anyone—Democrat, Republican, or independent—willing to have an open and honest discussion that delivers real solutions for the American people.”
This sounds nice. But Biden’s lengthy op-ed offers few specifics and zero real solutions. It’s mostly just trite politician-speak, political spin, and message-tested buzzwords. If President Biden truly hopes to bridge the divide and address our nation’s inflation woes, he needs to “have an open and honest discussion” with some free-market economists.