(The opinions expressed in guest op-eds are those of the writer and do not necessarily represent the views of RedState.com.)
On May 10, the day before the April Consumer Price Index report became public, President Joe Biden once again refused to take any responsibility for the worst rate of inflation the country has experienced in more than four decades.
According to Biden, “There are two leading causes of inflation we’re seeing today. The first cause of inflation is a once-in-a-century pandemic. … And this year we have a second cause: Mr. Putin’s war in Ukraine.”
Naturally, Biden failed to mention that throughout the pandemic, inflation remained below 3 percent. In fact, when Biden entered the Oval Office, well after the worst days of the pandemic, inflation was only 2.4 percent.
However, since Biden became president and unleashed the federal spending spigot via the $1.9 trillion American Rescue Plan and $1.1 trillion “infrastructure” bill, inflation has consistently increased under his watch.
Indeed, one of the few things Biden said during his inflation speech that passed the smell test was, “Republicans love to attack me as a big spender, as if that’s the reason why inflation has gone up.”
Of course, Biden said that in a mocking tone, but it is true nonetheless.
In reality, the present bout of inflation is monetary in nature. It is not due to the supply-chain crisis fallout from COVID-19. And, it is surely not due to Putin’s invasion of Ukraine.
And, although Biden’s speech on inflation focused mostly on reducing prices, that only addresses the symptoms, not the root of the problem. After all, in the early 1970s, when inflation was heating up, President Nixon enacted the Nixon Shock to quell inflation.
Unfortunately, this did not work. Price controls never do. And, many economists argue that the so-called Nixon Shock actually made inflation worse.
In its most basic form, the inflation that is ravaging the U.S. economy is the result of price distortions due to the debasement of the dollar.
While this has been occurring for many decades, primarily ever since the dollar was untethered from the gold standard thanks to Nixon, it has morphed into hyperspeed during Biden’s tenure in the Oval Office.
Making things worse, Biden has declared an all-out war on U.S. energy production, which has caused gas and energy prices to skyrocket. Because energy is the lifeblood of the economy, one should not overlook the role that high energy prices are playing in today’s inflationary environment.
Just this week, the price for a gallon of gasoline reached yet another all-time high of $4.40. Even worse, diesel fuel has spiked to a record-high of $5.55 per gallon.
When one combines massive government spending, enormous money printing via the Federal Reserve, and an administration hellbent on waging war against U.S. energy production, one should expect to create a witch’s brew wrought with inflation.
And, that is exactly what has been occurring under the Biden administration. It really is that simple.
Fortunately, there is a simple cure for the inflation that ails the U.S. economy. First and foremost, the federal government must increase the value of the dollar by reining in spending and raising interest rates.
Second, the federal government should put commonsense policies in place that will increase economic growth. This could be easily done by relaxing regulations on the U.S. energy sector for starters. Pro-growth policies such as lower taxes would also goose the economy, increase innovation, and spur job creation.
Some say the best definition of inflation is too much money chasing too few goods and services. If that is the case, then the best antidote to inflation is less money chasing more goods and services.
Chris Talgo ([email protected]) is senior editor at The Heartland Institute.
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