AMAC Exclusive – By Andrew Abbott
![inflation](https://static-asset.amac.us/wp-content/uploads/2023/02/28063438/Gavin-Newsom-biden.jpg)
Last week, California’s Democratic Governor Gavin Newsom announced that the state would distribute billions of dollars in “inflation relief” in the form of direct payments to residents by early next year, a plan that was quickly slammed by economists as likely only to worsen inflation. At the same time, Democrats in Washington – most notably President Joe Biden – have continued to push for even more massive government spending as a solution to the inflation crisis. With Republicans poised to retake control of Congress largely thanks to Democrat failures on the economy, it’s clear that inflation should be a top priority. So just what can a potential GOP majority do to alleviate inflationary pressures?
California’s scheme to solve the problem of too much money in circulation by putting even more money in circulation perfectly captures the problem Democrats now find themselves in, and outlines the challenge Republicans will have to solve if they indeed do take power next year. Having asserted for years that more government and more spending is the solution to every problem Americans face, Democrats now have no answers to the predictable negative consequences of massive government expansion and out-of-control spending – namely, the crushing inflation now wreaking havoc on the U.S. economy.
According to Newsom’s office, California’s plan will result in 17.5 million Californians receiving “between $200 and $1,050 by early next year.” Within hours of the announcement, multiple economists criticized the measure as a short-term solution that would have no discernable positive effects and only increase inflation in the medium-long term. As California State University economics professor Hannah Gabriel put it, “If the rebate is spent on gasoline, or other consumable goods that are experiencing high inflation driven by supply costs, then the rebates will likely increase the prices of those goods from increased demand—leading to more inflation.”
The inability of Gavin Newsom and California Democrats to grasp that these are exactly the kind of policies that led to runaway inflation in the first place mirrors the response of Congressional Democrats and President Joe Biden, who have sought to blame everyone but themselves for the crisis. Biden has asserted variously that the primary causes of inflation are “corporate greed,” Putin’s invasion of Ukraine, and the COVID-19 pandemic.
While all of these factors indeed likely have played some role in exacerbating rising inflation, any introductory-level economics student can figure out that the biggest cause of the inflation Americans now face is the unprecedented amount of money printed over the past two years. While some of this money was passed on a bipartisan basis and signed into law by President Trump to stave off the worst of the economic crisis at the height of the pandemic, Democrats rammed through $1.9 trillion of COVID “relief” money and a $1.2 trillion “infrastructure” bill almost entirely on party-line votes when signs were already emerging that inflation would soon become a major concern if they did so.
Democrats’ continued failure to do anything about inflation has many pundits predicting a “red wave” that will see the GOP retaking both the House of Representatives and the Senate. According to a June 26 poll from the Republican State Leadership Committee, 56% of voters cited “High cost of living/inflation, Economy in General, or Unemployment/jobs” as their top issues ahead of the 2022 midterms.
For Republicans, winning back control is only half the battle. Actually solving the inflation crisis will require implementing policies that Democrats have railed against for decades and, perhaps even more challengingly, convincing Joe Biden to go along with them.
Put simply, Republicans must embrace supply-side economics, or the belief that increasing the supply of goods on the market will bring down their price and expand the economy. This is done by decreasing taxes and removing business regulations, thereby incentivizing growth.
Biden, along with other Democrats, have been implementing the opposite approach. Their Keynesian (a.k.a. demand-side) economic approach has been to increase demand via heavy government spending and subsidies. This caused demand for goods to skyrocket. However, with the country still emerging from the pandemic, supply was utterly unprepared to meet demand. This led to “too many dollars chasing too few goods” and inflation skyrocketing. These principles of economics are the most basic and fundamental, yet almost no prominent economist employed by the federal government predicted the inflation spike.
While the most effective way to reduce inflation is for the Fed to increase interest rates, there are still several supply-side solutions for a potential Republican-led Congress to champion. While the GOP can’t on its own end the war in Ukraine or solve supply chain issues, they can focus their efforts on alleviating pressure on other areas of the economy, namely by cutting government spending and restricting the amount of money in circulation.
A solid first step toward this goal would be eliminating any remaining COVID-era government spending programs. This would curb the excess monetary supply by decreasing federal spending obligations. It would also incentivize unemployed Americans to rejoin the workforce, thus alleviating America’s critical labor shortage. Additionally, they can pledge not to advance any more of Biden’s spending programs, which would only worsen the inflation crisis. Even liberal economists concede that inflation rates would be far worse if the President’s signature $3.5 trillion “Build Back Better” bill were passed – something Democrats still haven’t given up on.
To encourage growth, Republicans can also reduce tax rates on industries facing critical supply shortages, eliminate onerous and unnecessary business regulations, and promote domestic oil and gas drilling. Though none of these solutions would eliminate inflation all on its own, together they would send a clear signal to the American people that they’re doing everything in their power to end the crisis, setting the stage for a much-needed change of course.
Andrew Abbott is the pen name of a writer and public affairs consultant with over a decade of experience in DC at the intersection of politics and culture.
It is doable but it would take guts perseverance and people would have to understand that there is only one way the hard way also Teddy Roosevelt grit to bust all the malefactors that control it all
GOP Congress can CUT inflation by:
Adapting CAGW.org to scrap Govt waste
Cut spending
Cut taxes
sunset programs
cut DC bureaucracy
CAN Help
Reopen pipelines
My only concern (? o.k. main concern) is the current Republican determination to phase out Social Security.
I read:
Senator Lindsey Graham (SC) has confirmed that if Republicans take control of Congress in the upcoming election, they will focus on “entitlement reform,” including Social Security privatization. Of course, when he says “entitlement reform” he means drastic cuts to your earned benefits.
I say there is an alternative. Remove the cap on income subject to the withholding for Social Security and Medicare. This would be equitable with no special privileges nor penalties for the wealthy who also receive Social Security and Medicare, but frankly could manage if there was ever a “means test.”
I sent each of the representative candidates a question asking their position on Representative Larson’s bill, “Social Security 2100: A Sacred Trust” without saying my own opinion. NO ANSWERS have been given.
Cutting regulations, decreasing government spending, reducing taxes, and increasing domestic oil production would all help to change our economy to a healthier condition. Hopefully, the Republicans are united in their plans to turn this economy around.
These self-centered and self-congratulatory politicians need to be turned out of office and the public dole and begin spending some of the wealth they have accumulated, paying their own way, especially, when they are not willing to formulate and implement policies that benefit the American citizenry and which represent the constitutional purposes for which the government exists. Americans have to begin to show some intelligence and an informed concern for the future of the county and future generations. What is happening is unacceptable based on standards of constitutionality, defined as what can be done because it is possible and legal to do it.
Has no one noticed yet that the GOP is full of do-nothing, big-talking, useless, and criminal politicians?
There is only a handful of good republicans. We can probably name them all….of the Matt Gaetz and Jim Jordan persuasion.
The GOP has had complete control of America twice now in my lifetime. They absolutely squandered both, not even killing the fetid, corrupt obamacare when they could.
The FIRST thing on America’s list is expelling all the rotten eggs in DC, including Fascist bureaucrats.
Game on. Let’s get to it.
The above solutions are good places to start, but overall, government spending must be reduced by paring down the size and scope of government. In combination with the above measures, we can take a multi-front war approach to addressing inflation and recession, in the hopes that the inevitable economic pain will be short much less in duration, with a lesser degree of impact (ripping off a band-aid). However, the bloat in federal government must be addressed in parallel with the immediate measures. Given the fact that Sens. Cornhole, ‘Martha’ Graham and ‘Mitt the Tit’ Romney will still be there and given how they have knuckled under on the latest gun grab, one shouldn’t expect much at this stage. Truth be told, the DC RINOs are better at staying in the Minority and complaining at their base than effectively governing.
One can only hope for a GOP congress and that they have the fortitude to address the numerous issues plaguing us.
I fear they will not be strong enough to meet the need.
State governments cannot make monetary inflation worse because they cannot print money which de-values the currency. States have to borrow or raise taxes to give money away. These ruling class people are evil and hate the American ideal of self-government and doing everything to destroy Americans’ independence from a power hungry central government.
Hopefully the Repubs will take over the House and Senate. But will they do what they say they will do. Seems like they just sit on their hands and don’t do anything. Time will tell. Remember both parties say they will do something about policies but end up lining their own pockets Like I said we will see.
Republican congress should have half their staff writing new laws to restrict emergency powers, end censorship, restrict yellow journalism, stop government employee lying, and limit executive orders powers while the other half works on impeaching every single democrat and investigating dnc crimes.
America does not have a chance of surviving if we do not turn the country back to past principles that work. If you Listen and read a wide spectrum of news. This administration has said everything they believe and plan to do to turn America into a clone of communist governments around the world.
How magnanimous of Newsom to return the excess tax revenue back to the citizens who had to pay it in the first place.
Colorado’s governess Jared Polis must’ve gotten a new T-Shirt today with Biden’s likeness on it that says “I’m with Stupid” as the Colorado State Department of Revenue, instead of cutting taxes, just established a new tax because they are “so popular” a “Retail Access Delivery Fee” that consists of 6 separate different taxes (“fees” because Colorado’s TABOR law would require the government to have the people’s approval to establish a new tax). A Community Access Retail Delivery Fee, a Clean Fleet Retail Delivery Fee, a Clean Transit Retail Delivery Fee, a General Retail delivery Fee, a Bridge and Tunnel Retail Delivery Fee, and of course straight from psychotic minds an Air Pollution Mitigation Retail Delivery Fee, all charged into one for now until they can inflate them all one by one into more unbearable taxes of their own. Seems Democrats across the board seem to lack a basic understanding of each of the reasons the Revolutionary War was fought, or of the U.S. Constitution that was created to prevent what happened under King George III to re-occur. The alternate universe dwelling socialist/communist mind is flirting with civic disaster in the face of hyperinflation. Should be popcorn time any day now as politicians have lost their collective minds, if they ever had any to begin with.
No matter what ‘pittance’ that piece of crap gives us, will still not make up for all the extra gas taxes and others he has implemented since being in office. We need to vote him out in Nov. I hope Dahle harvests ballots like crazy…that is how Newscum won before.
By the time I read the first half of this article, it was clear it was written by yet another inside the beltway politico type trying to triangulate every side of political spectrum while offending no one and offering up a convoluted solution. This is the danger of writers with no real fundamental understanding of economics beyond what they hear at social gatherings trying to articulate a rational solution to a problem the federal government once again created for the American people.
The simple fact is the federal government under this administration largely created the inflation problem by flooding the American economy with excess dollars (it simply printed $3.1 trillion of new dollars on the Treasury printing presses and dumped them into the system devaluing all existing dollars in circulation – classic currency debasement!), while at the same time the Democrats chose to reduce domestic oil and natural gas production in this country that layered additional transportation costs on everything that moves from one point to another in this country (this is known as creating a supply chain distortion by removing supply while demand stays constant or is accelerating). The end result is the predictable inflation you see all around you in everything you buy.
The author then suggests that the best way to tamp down inflation is for the Federal Reserve to raise interest rates as if slamming on the brakes to an already slowing economy won’t have serious side effects like triggering a recession and creating a substantial uptick in unemployment and the associated economic fallout that always follows. Classic inside the beltway mindset where everyone in Washington is immune to the destructive consequences of their actions.
If the author and others like him want to offer up a much more concise and coherent solution to bringing the rate of inflation down to say 4 or 5 percent (sorry too much damage has been done by Biden and Democrats to get it back down to 1.4 percent where it was under President Trump), then they should simply travel outside the Washington, D.C. beltway and discuss the matter with someone like Art Laffer or Thomas Sowell and leave the political triangulation bs back in Washington, D.C..
Bribing taxpayers with their own money to secure the fall election cycle is typical for these people.
Between $200 and $1060?? How the h@ll is that going to help anyone?! Especially in California?
Newsome has some kind of gall to suggest that a mere pittance like that will help anyone in Ca.
Biden & Company:
“Let’s send them out more meaningless stimulus checks so we can confuse the crap out of them when it is time for them to do their taxes. We can also spend more money on the illegals streaming into our country like we promised big business in exchange for political contributions. Along the way we can create more bureaucracy by hiring a bunch of low IQ college grads to create more forms and push meaningless paper related to the stimulus re-collection efforts, furthermore, we can collect on the unpaid taxes we dream up as late fees the IRS will associate to the stimulus checks. Brilliant! . That will show these damn deplorables!”
For me, the way the repubs can turn the economy around is to just do esactly the opposite of what the present administration is doing….simple.
????CHRISTrumpOwens and all our US TRUMPlican Lawmakers successfully US 2022-2036 Reelected Landslide
Amen & Amen????
All these rat democrats have are horse s*** slogans. Donkey Dems are a disease.
Just another way to buy votes They believe if you are breathing you can vote They have lost this November and are trying to reduce the lossPresident Biden is a liability to the democrats as was the plan all along. Now is the time when the original plan takes shape. Biden will never finish his term of office being replaced by Harris as planned Then Harris appoints a Vice President and I have a good idea who.Hope something is left to work with to save America.????Am old want to see a great country before my chips are called in.
And this buckethead thinks he will be our next president. He is as illiterate as his auntie Nancy Pelosi. Dumbass. Com
What a slap in the face from that rich a-hole Newsome! He’s going to give people some of their own money, not enough to really buy anything, and that’s supposed to make things better? What a jerk!
What a joke Gruesom Newsom is!! My property taxes have gone up $500 this year, and every time I get gas it’s gone up. So, he’s taxing us more and more, and then giving a little of it back, to make all the liberals in the state think he cares about us!!!! I’m just putting mine in my savings account to help pay my new higher property tax bill. Out of one pocket and into another!! He really thinks he’s doing something for the people of California. I voted to impeach him, but there aren’t enough conservatives left in the state to get any meaningful legislation passed. ): please pray for us.
Remember that when the government gives you money, they take it from someone else.
The question now becomes, will the Republicans do what needs to be done??
290 in the House and 67 in the Senate.. Those are the 2/3rds numbers needed to override a presidential veto. Those kind of numbers would also prevent the Dems from filibusters and other congressional road blocks. With these majorities, conservatives could also employ the Congressional Review Act to blunt federal agencies like the EPA, OSHA, Department of Interior or HHS from enacting any more regulatory requirements on the nation. We might get close in the House, 60 in the Senate will need some heavy lifting but would prevent filibuster. 67 wishful thinking or realistic?
On another issue: People or Animals do not heat or cool the Earth. Government/ Global scam for control of all the Earth. Socialism of the Earth is their goal. Lord help us!
This Administration is doing it’s best to destroy America in multiple ways.
If this election were not stolen: The Bidens, Clinton’s, and more. Would be in prison right now with the Epstein list
This installed president has been indoctrinated into a culture of government is GOD! He’s the puppet master for the new world order, or new liberal order , there intertwined with each other. This president is doing everything in his authority to completely transform our country into a tyranny. Exactly what our founders were protecting our country from with our great and one and only constitution . This is a serious problem, he actually believes he’ll be the first president to completely transform this republic into something that it was never intended to be. With the progressive socialist democrats firmly behind him and trillions of dollars also ( most of it black money completely corrupt) and the woke corporations and big businesses all in on this, if there not trust me there GONE! It’s a dire situation right now. This is right out of the Marxist playbook and there playing it better than ever. We as true American citizens I’m sure fully understand what this means for our country and our families future. This is a straight up attack on our citizens by a completely and brazen administration, they actually couldn’t care less about anything or anyone. It’s all about CHANGE, at any and all costs. I wish I had a solution and like yesterday. There definitely going to rig this mid term election again. It’s up to all of us to turn back and destroy these Marxist haters of our country and all it’s great citizens.
We also must fully understand that the RHINOS are traders and must be eliminated. There no better than these Marxist haters and must be destroyed.
Socialism is Equality in Poverty
The ignorance of some American citizens the on how the economics in our economy works is puzzling.. One needs only to recall the transition that occurred during the Reagan years after President Carter’s administration. Those 4 years of Jimmie Carter were painful. It took at least 3 years before we could start to see daylight. All of the good work accomplished was forgotten and of course there was the first war in Iraq that drained us financially. That statred our decline which continued through 3 more administrations. We cannot duplicate that mistake again. We lost valued treasure, in human life lost as well as plenty of funding that could have been spent on our infrastucture. Also, We as a nation must make a concerted effort to have better Economics, and History, and Cursive Hand Writing restored taught in our schools so we do not have so many people that seem to be dullards on the basics of educated talent.
We’ve got a big problem, too, with too few people chasing the huge number of jobs. Solution: close down government departments, like Education, and put those people out of work.
These 2 are wooden head dummies.
I hope that Republicans can tame inflation in future. What is impact of increasing Fed Deficit thru terms of Obama & Trump for 12-years …as this was both parties. Also, what is impact of Trump’s tax cuts of $1 Trillion per year. And the Fed should have started raising interest rates a few years ago: Lastly , the Fed is independent , but I remember Trump harassing the Fed about interest rates & wanted it at zero & now Biden has negative comments about Fed raising rates. Does either party understand what causes inflation today & do they understand how the Fed stopped this runaway inflation back in early 80’s.
Why do so many US Corporations pay $500 or less in Federal taxes each year? And would like to see analysis of Trump’s tax cuts for corporations & what positive outcome of this & is this contributing to inflation today or not ?? Does this tax cut continue until year 2025???
cut the Washington bureaucracy by 70%
The inflation in AMERICA will not turn around until we get rid of these greedy liberal democRATS and bring back a non politician like President Trump and even then it will take a very long time to recover from biden,nonobamba,soros,peelosi and the rest of the scum that is intent on destroying AMERICA.
Simple solution: ask yourself “What would a Democrat do?”… AND DO THE OPPOSITE! Problems solved!
Don’t ASSume the Dumbocrats won’t hold both House and Senate in November. NOTHING has been done to ensure free, fair and honest elections nationwide. The fall fraud fest is heading soon to your community.
These Democrats are such idiots. It’s Economics101. They obviously did not take any Economics classes in college if they even went to college. Such an outrage that they are so stupid and are destroying this country because of it. Makes me so angry.
RED=REMOVE EVERY DEMOCRAT
All we really need in congress is common sense, which we have very little of. We certainly need to first protect freedom and America’s values but stop the hate and start doing what is best FOR THIS COUNTRY. IF politicians can ever work together, this country will become great again. Until we stop deliberately destroying a persons integrity just because we disagree with them or their party, whether they are good or not, we will continue to live in the sewer. Whatever happened to open debate and respect rather than hate filled words? We see socialism/Marxism on full display and shouldn’t like what we see.
Biden will be gone if Conservatives win in 2022.