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Biden’s Policies Seem to be Encouraging Inflation

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It’s no secret that Joe Biden is worried about inflation. In an op-ed piece for the Wall Street Journal, the vice president lamented that the country is on the wrong track and that it’s difficult to hold on to our own money. As a result, the American people are feeling an unimaginable strain. Despite the dire situation, President Biden seems to be ignoring the problem, but his disingenuous comments will certainly have the opposite effect.

As we head into the election season, it’s important to pay attention to the supply side of the economic equation. Excessive government regulations are holding back business and delaying production. The Biden Administration hasn’t created a constructive environment for producers, leading to the worst inflation in 40 years. Meanwhile, the administration has increased costs on businesses, which means they pass the cost onto consumers.

In addition to raising taxes and spending, the social spending bill front-loads spending by spreading taxes over a decade. That means it’s putting pressure on prices when families are least able to pay for it. This rhetoric has been endorsed by both sides of the aisle.

President Biden has made housing costs a top priority. A $1.9 trillion economic relief package passed by Congress with Democratic votes will ostensibly reduce the burden of high housing costs over time. Several legislative and administrative measures might help close the housing supply gap within five years. Starting July 15, these policies will align with existing federal and state policies that are intended to reduce costs. When the supply gap is closed, it could mean attainable homeownership for more Americans across the country. But these changes do little for the economy in the short run.

The Biden Administration had been trying to stall inflation by keeping interest rates low, but the Fed is taking a different approach. Chairman Powell says inflation will take longer to reach its price stability goal. Currently we have inflation of over 8 percent, which we haven’t seen since the early ’80s.

Whether Biden’s proposals are intended to reduce the deficit, boost GDP growth, or slow economic activity, they’ll be difficult to implement. A wealth tax — popular among progressives, but toxic to most voters — is both difficult to administer and has negative effects on the economy. Moreover, asset values change on a daily, hourly, and even minute-by-minute basis.

Finally, on Biden’s Energy policies, The Hill notes “Biden largely puts responsibility on the Federal Reserve to stabilize inflation. He expects tapping emergency energy reserves will lower gas prices, but this will barely make a dent. And, shockingly, he wants to raise taxes on American businesses, which Biden believes will reduce the deficit, slow inflation, and create jobs. Mr. President, Americans need relief right now from historic gas prices, sticker shock at the grocery store and dread over this summer’s air conditioning bills. Small businesses are rightfully concerned about surviving after having to absorb an unreasonable amount of costs since the Biden administration took office.”

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