President Joe Biden has united the American people—in disapproving of his performance, with 70 percent of Americans disliking the direction the economy is going and over 6 in 10 blaming him for it. These low approval ratings can be explained by the impact inflation has on individuals’ pockets and their concerns regarding government expansion. It is a good time to make a change.
Washington Post-ABC recently asked: “How concerned, if any, are you about Biden’s inability to expand the role and size of U.S. government?” society?” 59% said that they are “very” or somewhat concerned. 38% said they weren’t so or not at all concerned. One, I’m glad Americans are paying attention to the Democrats power grab.
The expansion of the government didn’t begin with this administration. The continued expansion of federal government’s size and power has been a result of both parties. This was long before 2020. They also came together to make sure they spent as much money as possible on COVID-19-related items (or not). Today’s Democrats, however, are pushing the boundaries by further enabling federal takeovers of child care and energy.
Although it may seem like it would be politically profitable for lawmakers to make people richer, especially if they believe voters will cover the cost, we know that this strategy doesn’t work today. After the passing of the $1.9 trillion COVID-19 Pandemic Relief legislation, people are unable to receive as much money from that cash. It doesn’t really matter if this inflation is caused by our large COVID-19 fiscal reaction, the Federal Reserve’s 36% increase in money supply from February 2020 to September 2021 or pandemic-related supply chain bottlenecks. Politically, people feel slapped with high prices at the supermarket and rent increases, even if they don’t have the same wages.
Also, experts are wrong about inflation. They first claimed that there wouldn’t be inflation. When inflation did occur, however, they claimed it would either be temporary or short-lived. It continued for a while, claiming that inflation was due to prices catching up with pre-pandemic levels. After experts admitted that some policies by the government may have contributed to some of this demand for durable products and the withdrawals of workers, the government told us that it was impossible to fix the problem or that inflation would be the cost of a healthy labor market.
While all of these factors might have contributed to the present situation, they don’t necessarily indicate confidence in how much longer the problem will persist or the impact on prices.
What should we do next? In order to improve supply-side policies and reduce restrictions in housing and infrastructure construction, it is recommended that occupational licensing and licensing be made mandatory. The Democrats’ “Build Back Better (BBB), plan is a way to add fuel to the flames. The administration says the bill will lower inflation. Ben Ritz, of Progressive Policy Institute reminds us that The Wall Street JournalIt is believed that the 17 Nobel laureates signed a highly-publicized letter declaring BBB would reduce long-term inflationary tension. They did so when tax increases on the wealth were expected to fully pay for the bill. It isn’t so, therefore this Nobel Letter has lost most its predictive power.
BBB’s many regulatory disincentives and regulations will have a significant impact on the supply of labor. These subsidized sectors will see high prices. As unemployment has fallen to pre-pandemic levels, and as the economy continues to grow, spending on the economy should not be a priority. The Wharton School analysis shows that the BBB Plan’s true cost is $4.26 Trillion with a $1.56 Trillion deficit funded, and not $1.75 Trillion. Once all budget gimmicks have been taken into account, it will pay for itself.
Democrats signal that they want to inflame inflation so they can control more federal power, even though they may have to risk painful interventions by the Federal Reserve. This will not do much to ease people’s concerns about the government’s growth.
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