Bidenomics: Controlling Inflation by Making Us Poorer

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Bidenomics: Controlling Inflation by Making Us Poorer

By John Green

 

 

Bidenomics is the topic of the month for the MSM.  President Biden is claiming that his economic policies are working.  His supporting evidence is that the economy has grown since being shut down, people who were prohibited from working are now returning to work, and inflation has slowed.

Is Bidenomics working?  It depends on what your definition of "working" is.

Economic growth and job creation, as measured in 2023, are not indicators of economic expansion.  You've heard of "figures don't lie, but liars figure"?  Twenty twenty-three economic growth and job creation numbers are the "liars figure" statistics.  They're being measured against the years of forced shutdowns — making them meaningless.

That leaves the question of inflation.  Is Bidenomics bringing inflation under control?  Perhaps, but with great pain.

Product prices are driven by supply and demand.  Prices can be lowered by increasing supply or by lowering demand.  Donald Trump controlled inflation by increasing supply.  He unleashed industry to flood the market with products.  Productivity was up, prices remained low, jobs were abundant, the economy expanded, and our standard of living improved.

 

Joe Biden is attempting to control inflation by focusing on the demand side of the equation.  He is fighting inflation by raising interest rates and taxes — thus lowering our ability to purchase.  As interest and taxes go up, fewer people can make big-ticket purchases, demand is lowered, and prices stabilize.  By reducing our ability to purchase products, supply exceeds demand, and prices remain under control, but our standard of living declines.

Let's examine some of the factors that drive inflation.

Whenever the government lowers the value of our money, inflation increases.  When our "public servants" in Washington put more money into circulation by either borrowing it or printing it, the value (buying power) of the money goes down.  It's simple supply-and-demand economics.  The more there is of something, the less valuable it becomes.  Venezuela has tons of money — and it takes a ton of it to buy bread.  The Venezuelan currency is the Bolivar, and they're issuing it in 50,000-Bolivar notes — because that's what it takes to buy anything.  Venezuela proves that artificially creating money triggers inflation.  Our federal government currently has over $31 trillion in borrowed money.  And yet Joe Biden wants to borrow more — hence his demand to raise the national debt ceiling.

Product scarcity also factors into inflation.  Precious metals are valuable for one reason: they're rare.  Again, it's simple supply-and-demand economics.  If there's not enough of something to meet the demand, prices go up.

This brings us to our struggling supply chain.  If there aren't enough products to meet demand, the available products get a bit pricey.  COVID protocols and work disincentives starved the country of skilled workers and disrupted the flow of products into the supply chain.  Restrictions on domestic fuel production have created energy shortages.  Attempts at social engineering, such as California's AB5, which killed private contracting (gig contracting), are further disrupting the supply chain.  As a result, we continue to see shortages for products and services that used to be routinely available — paper products, repair parts, food staples, dog food, and even baby formula.  Skyrocketing prices for those products are the inevitable consequence.

We can't talk about inflation without also talking about production costs.  I know this is a hard one for liberals to understand.  When it costs more to make and deliver a product, prices go up — and it has nothing to do with profiteering.  The costs that businesses pass on to their customers include:

• Raw materials
• Labor
• Processing expenses
• Overhead expenses

Is Bidenomics helping with production costs?

Joe prolonged unemployment benefits — paying people not to work.  Businesses continue to suffer from labor shortages.  They're overcoming that by offering higher pay and passing on that increased labor cost to their customers.

The Biden administration has also increased the regulatory burden on manufacturers.  In the name of controlling the weather, the Biden administration has rolled out hundreds of new regulations on consumer products — all of which raise prices.

A big piece of the processing expense is the price of energy.  It takes a lot of electricity to turn a raw block of aluminum into a shiny new rim for your car.  Therefore, skyrocketing energy costs are also contributing to inflation.  When the price of fuel goes up, Americans feel it not just at the pump.  They feel it with every purchase they make.  Is Biden helping with spiking energy costs?  Nope, he's canceling pipelines, restricting fracking, canceling drilling permits, and draining the Strategic Petroleum Reserve (which will drive up fuel prices in the future).

But let's not forget about those overhead expenses — of which taxes are a big one.  Biden's plan also includes massive tax increases — especially for businesses.  Those taxes will increase the cost for every company to stay in business — and he's adding 80,000 IRS agents to stay on top of collections.  Businesses will pass those costs along, and prices will go up.

But inflation is driven not only by scarcity and production costs.  It's also driven by expectations.  When buyers expect prices to go up, they make purchases before the increases take effect.  In so doing, they increase the near-term demand and drive prices up.

For example, when investors expect a commodity — like oil — to go up, they buy oil futures.  Futures are a contract to buy a certain amount of oil at an elevated price.  They're hoping the price goes up even more than their contract price.  If it does, they can sell their contract and make a profit.

But by buying the futures, investors drive up the cost of oil and trigger inflation.  That's why gasoline prices went up so quickly when good ole Joe went to war with the oil industry.  He triggered an immediate increase in prices by setting the expectation that prices would go up even more.

What is Biden's economic plan? 

• Borrow enough money to further devalue the dollar.
• Increase taxes on hardworking Americans.

• Commence Green New Deal initiatives to impose more burdensome regulations on an already struggling system.
• Implement a nationwide restriction on gig contracting, exacerbating the supply chain labor shortage.

Like every Democrat, his solution to any problem is to do more of what created the problem.

Bidenomics is Joe's plan to continue crushing American productivity (making the factors that cause inflation worse) and then attempting to control inflation by reducing each American's purchasing ability.  Rather than controlling inflation by increasing supply, he's lowering demand by raising interest rates and taxes — choking our ability to make purchases.  Fewer homes, cars, and appliances purchased translates to less money for builders, assemblers, and mechanics to spend.

Bidenomics is lowering the standard of living in America, to control inflation, and then claiming success as our savings is drained.  According to Forbes, the rate at which Americans save money has collapsed from over 25 percent when Biden took office to under 5 percent in 2023.  Americans are consuming what was once their discretionary income to survive under Bidenomics.

Is Bidenomics working?  Sure, if "working" is defined as lowering inflation by making Americans poorer.

John Green is a political refugee from Minnesota, now residing in Idaho.  He has written for American Thinker and American Free News Network.  He can be reached at greenjeg@gmail.com.