The just-released numbers on consumer price increases in April showed some modest improvement-- down from 8.5 to 8.3 percent. But this high inflation rate is still running far ahead of worker wages -- meaning low and middle income families are feeling a continued financial squeeze.
Just why are prices so out of control?
Government spending and deficits are the primary cause for the high inflation, so naturally in his Tuesday speech on inflation, President Joe Biden announced an anti-inflation strategy of bringing down rising prices by adding hundreds of billions of dollars of more government spending.
The White House seems to have forgotten that there’s nothing to be learned from the second kick of a mule.
Biden has already spent $3 trillion to stimulate the economy, but all that cheap money only stimulated higher prices. That would happen again if the Biden inflation plan were implemented.
I’ve gone through the White House inflation-fighting plan and the wish list of spending adds at least $100 billion more to debt spending. That doesn’t include the $1.5 trillion he wants for student loan "forgiveness" or the $40 billion for Ukraine relief (with no offsetting cuts elsewhere).
The Biden spending wish list includes:
*Child care subsidies
*Elder care subsidies
*Payments to purchasers of electric vehicles
*More unemployment benefits
*Aid to farmers
*A new federal home-building initiative
*Investing more federal resources to create competition in the meat and poultry producers
*More green energy subsidies for windmills and solar panels
It all sounds like the Green New Deal and Build Back Better in disguise. And it looks like this inflation crisis is one that is viewed as "a terrible thing to waste."
None of this will work and the price controls in the plan on drugs, beef and poultry will only make shortages worse -- as happened in the 1970s.
The tax increases on American companies will only make the U.S less competitive. It will reverse the Trump tax cuts that created jobs and raised wages
In 1976 President Gerald Ford launched an anti-inflation plan called Whip Inflation Now aka "WIN" and he issued WIN buttons.
Obviously that didn’t work and neither will this plan.
We need to be cutting government spending and almost all Americans know that. Except those in Congress and the White House.
Stephen Moore is a senior fellow at the Heritage Foundation and an economist with Freedom Works. His latest book is "Govzilla: How the Relentless Growth of Government Is Devouring Our Economy" (Post Hill Press, December 2021).