August 22, 2022

When should a sitting president be held accountable for economic performance? It’s not an easy question, but I think right now could be such a time.

President Biden said his policies haven’t caused the horrible inflation we’ve experienced. Yet, these are the biggest price hikes in decades, and they began once he took office.

Why is that?

I think a single policy objective put in place by the Biden administration laid the groundwork for runaway inflation – his decision to approve nearly $6 trillion in new “economic stimulus” spending. It came in the form of pandemic relief, infrastructure spending, and family programs.

While ambitious, it was unnecessary.

The Trump administration had already passed major relief via the 2020 CARES Act, which totaled $2.2 trillion and was the largest stimulus package in American history. That legislation led to 33% economic growth the next quarter.

In December 2020, Congress threw another $900 billion into the economic recovery effort. Once President Biden announced his plan for more spending to follow, many people warned of potential inflationary repercussions. But those warnings were disregarded and in March 2021 the first component of the $1.9 trillion American Rescue Plan was unveiled. In April 2021, the second and third waves of the plan were unleashed at a price tag of about $4 trillion.

The inflation rate was roughly 2% then. It soon jumped to more than 5%. The rises after that have a lot to do with the war in Ukraine and disrupted supply chains for key commodities. But I think that was fuel on an inflation fire that was already burning hot. Where did the fire begin? President Biden’s economic rescue efforts.

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