Brace for heavy weather. Biden and Democrats are driving inflation to hurricane levels. In 2018, the annual inflation rate was 1.9 percent. In 2021, the annual inflation rate is 5.3 percent. It is about to rip shingles off personal budgets, especially for those on fixed incomes, with credit card, mortgage, or variable interest debt. Why? See, e.g., Current US Inflation Rates: 2000-2021.
Three reasons explain why inflation is about to get worse, not better.
First, Democrats’ excessive federal spending is unaffordable. Driven by vote-chasing, irresponsible fiscal stewardship, and one-party control over House, Senate, and White House, Democrat spending is effectively unchecked. Trillions more are coming if Democrats get their way. Beyond the current fracas over how to twist “reconciliation” to get votes needed down to 51, intimidate the parliamentarian, jam two bills totaling $4.7 trillion through both chambers, Democrats are likely to continue spending. See, e.g., $3.5 Trillion Is a Phony Number.
Above and beyond this wild, supplemental, “non-regular order” spending in the fiscal year 2022, more can be expected. While passage of either the $1.2 trillion “infrastructure” bill or $3.5 trillion “human infrastructure” (or “Build Back Better”) bill – or both – will quicken inflation, more can be expected.
No one is talking about this, but after December 3, a continuing resolution runs out, and Congress will likely pass an “omnibus bill,” capturing in one bill the unfinished and delayed “regular order” process for funding programs until October 2022.
Into that “omnibus bill,” or emergency legislation passed at the same time, Democrats may push other spending. Specifically, as the “delta variant” of COVID continues, and Democrat mandates shutter businesses, an excuse may be made for more COVID relief spending.
In addition, on December 31, many current provisions end, including the payroll tax deferral, employee retention credit, enhanced child tax credit, tax extenders, emergency disaster loans, and various medical and fiscal checks, which could be suspended by Democrats. All of this produces increased spending.
Second, Democrats’ anti-energy independence hurts. Energy costs are soaring – because Biden and the Democrats shut down, penalized, and disincentivized US energy independence while proving unable to lower the international cost of oil through diplomacy. See, e.g., OPEC+ Predictably Rejects Biden Plea For More Oil Production.
The result has been both predictable and devastating. Oil is now at a near-record high, impairing Americans at the gas pump and suggesting oil shortages and sky-high fuel costs for winter heat. See, e.g., Oil hits $80 per barrel a seven year high; Biden Caught Flatfooted By Skyrocketing Oil Prices.
As the US energy sector shrinks, consolidates, tries to survive, Biden and Democrats pursue the wishful idea that multi-decade build-out costs for wind, sun, and other renewable power generation will magically compensate for non-production, create jobs as fast as destroying them, and keep costs low. That is worse than miscalculation – it is pure, unadulterated fiction.
The truth is that Biden and Democrats are destroying the US energy sector, chasing energy unicorns as they kill horsepower that runs the US economy, US cars, trucks, buses, trains, planes, and production – not to mention economically keeping Americans warm in cold winter months. The result is a double hit that will raise consumer costs. They will wipe out a sector’s employment while causing consumers to pay more for what that sector used to produce – and from foreign sources. See, e.g., About Joe’s Energy Jobs; Gas Prices Surge as Biden Targets U.S. Oil Production; Biden’s assault on oil and gas industry threatens jobs, energy security.
Third, Democrats’ anti-business policies raise prices. As the Biden White House and Democrats push hard-to-meet mandates on businesses nationwide, provide cash and non-cash benefits rewarding non-work, and excuse increased dependence on the government, the effect is business cuts and closures.
Business cuts and closures come with obvious effects, including lower employment (already starting to show up in the numbers), lower consumption, higher costs for what we are producing less of, supply chain disruptions within and across economic sectors, increased foreign dependence (since we have less of what would be produced domestically), and reduced consumer confidence. The big effect is less work and income trying to buy less available goods and services at higher prices.
Even mainstream media are being forced to report that the economy is headed lower, prices higher, and rosy Democrat projections are simply not bearing up. See, e.g., Employers add a dismal 194,000 jobs in September, unemployment rate at 4.8%; Buckle Up: 3 Reasons Why Inflation Is Rising.
Where does all this excess spending, anti-energy independence (affecting all sectors), and anti-business sentiment lead? Until fiscal restraint returns, program cuts match revenues, mandates come off, taxes come down, and free enterprise, job creation, and investment are respected – no place good.
In short, brace for heavy weather. Biden and Democrats are driving inflation to hurricane levels, spending like a wind machine, toppling pillars of the US energy sector, hampering the production of goods and services, creating an imbalance between supply and demand, sure to whip up the winds of inflation.