How Biden’s Spending Explosion Caused the Inflation Crisis
Now that the election is safely in the past, we are finally getting some clarity about the economically damaging inflation that crippled Joe Biden’s presidency and swept the legs out from Kamala Harris’s attempt to become the 47th president.
The Wall Street Journal on Sunday night published a piece by Nick Timiraos, the paper’s chief economics correspondent and the nation’s leading Fed interpreter. Timiraos’s status as the Fed’s main conduit for indirectly communicating with investors and the public and as the Journal‘s top economic news guy is important to understanding the impact of this story.
The title of the article is “How Democrats Blew It on Inflation.“ The subheading goes on to explain that “[i]n avoiding the missteps that followed the 2008-09 financial crisis, officials made new mistakes that led to political defeat.” In other words, the article is laying inflation and its political consequences—the Republican sweep in the recent elections—at the feet of Biden and the Democratic Party.
The story begins exactly where it should: the decision to immediately push for that enormous $1.9 trillion spending bill misleadingly named The American Rescue Plan. As we have frequently argued in the Breitbart Business Digest, this was the crucial step for pushing the U.S. economy from what would likely have been a mild inflation resulting from pandemic supply chain dislocations into the full-fledged crisis we experienced.
We Saw It Coming in 2021
We’ve been covering this for years. As early as September of 2022, we wrote that “the massive and unnecessary fiscal expansion of Biden’s first year in office pumped up demand so much that it set the economy on track for the worst inflation in four decades.” As early as the spring of 2021, we were warning that inflation was rising too rapidly and was likely to weigh on the financial health of lower-income Americans.