Decoding the disastrous Bidenflation
Joe Biden has once again led the U.S. into uncharted catastrophes due to his ignorance about the fundamentals of economics.
On Thursday, the Bureau of Labor Statistics reported that inflation in the U.S. climbed to its highest level in 40 years in January, causing prices to rise by 7.5% from a year ago.
When Biden took up residence in the White House in January 2021, President Trump gifted him an inflation rate of just 1.6%. This was when COVID-19 restrictions were still imposed, causing businesses to either be closed or operate with restrictions. The current numbers are more troubling, considering that restrictions across the U.S. have been eased.
To sum it up, in just one year, Biden managed to increase the overall rate of price increase by almost five times. But beyond the figures and statistics, what really matters is the causes, impact, and potential solutions.
We first look at the potential causes.
The primary contributing factors to inflation are a vast increase in the money supply through Federal Reserve purchase of federal debt instruments issued to cover deficit spending, soaring demand, and the supply chain crisis.
Driving the supply chain crisis are port bottlenecks, high transportation costs, and a labor shortage. The reduction in the workforce has been caused by COVID-19, vaccine and mask mandates, the closure of schools — which compels parents to stay home — and COVID-19 unemployment benefits surpassing potential wages.
The Canadian trucker border blockade against the vaccine mandate will impact the transportation of goods and worsen the supply chain crisis. The movement could inspire U.S. workers to conduct similar protests, which will worsen the labor crisis.
Also connected to inflation is the price of energy.
Back in January 2021, Biden shut down the Keystone Pipeline and imposed numerous restrictions on fracking. This ended the U.S. energy independence that was created by President Trump and was one of the contributing factors to the U.S. energy crisis.
The price of fuel has an impact on prices because the price of any consumer item includes the price of transportation.
Biden also waived sanctions on Nord Stream II, Russia's state-owned energy company subsidiary, which increased European dependence on Russian gas. A war over Ukraine or sanctions on Russia will cause a further energy shortage, resulting in global gas prices skyrocketing. Rumblings of war have further caused gas prices to rise.
The massive influx of unskilled and uneducated illegal aliens also means there are more mouths to feed while the supply remains as is. The fact that they may not have the means to pay will only cause more government spending.
We now look at the impact of inflation.
The price of gasoline rose by an emphatic 40%. According to the Poynter Institute, the average price under President Trump was $2.50 per gallon. Under Biden, the average price rose to $3.47 per gallon.
In 2021, U.S. vehicle owners paid $144 million more for gas per day under Biden than they did under President Trump.
The price of used cars is now up by 40.5%, while the price of new cars is up by 12.2%. The price of essential food items such as meat, fish, poultry, and eggs is up by 12.2%, while the price of bread and cereals is up by 6.8%.
The average household spends $250 more per month on groceries and gasoline, which amounts to over $3,000 a year. Consequently, owing to minimal pay hikes, average workers have lost at least 1.9% of their take-home pay.
The New York Post interviewed four middle-class taxpayers who highlighted a rise in the cost of health food items, electricity and gas bills, and even the price of toilet paper.
To sum it up, every activity such as eating, driving, and central heating at home saw the highest price spikes in decades resulting in a cut-down purchase of non-essential items and bulk purchases.
This obviously has contributed to the economic slowdown.
The Democrats frequently claim to be the party of the working class, the downtrodden, and the persecuted. Their inflation catastrophe has certainly hurt their base the most.
There were also huge losses in the stock market on Thursday as traders withdrew their investments.
The tech-heavy Nasdaq Composite slid by 2.1% to 14,185.64, while the S&P 500 shed 1.8% to 4,504.08. The Dow Jones Industrial Average lost 526.47 points, or 1.47%, to 35,241.59.
Stocks were volatile throughout the day and finished deeply in the red amid speculation that the Federal Reserve would get more aggressive with its tightening policy to combat inflation.
How can Biden resolve the inflation crisis?
Firstly, the total removal of mask and vaccine mandates will help bring back the workforce. Secondly, COVID-19 welfare payments must be made sparingly, only to those in real need. Thirdly, a resumption of the Keystone pipeline will improve the energy situation and bring down gasoline prices. Fourthly, a drastic cut to gratuitous government spending. Finally, a moratorium on irresponsible utterances of war with Russia.
How did the clueless-in-chief Joe Biden respond?
Thankfully, he did acknowledge the stress on American families caused by inflation, but he went on to claim the following:
On higher prices, we have been using every tool at our disposal, and while today is a reminder that Americans' budgets are being stretched in ways that create real stress at the kitchen table, there are also signs that we will make it through this challenge.
A citizen looking to the president for hope would be thoroughly disappointed. There were no specifics to explain the cause or prescription for a solution, but merely ramblings.
Biden's record isn't very inspiring. Last December, he claimed that the 6.8% inflation through November was the "peak" of this crisis and that matters would improve, but now matters are much worse.
That disappointment showed in a recent Politico/Morning Consult poll. The voters ranked the economy as their No. 1 issue. Among these voters, an overwhelming 73% said the U.S. is on the wrong track under Biden. Biden's approval rating is below 40% and sinking.
Apart from empty words, has there been any reaction from the Biden administration?
They are still busy repackaging his rejected ideas from Build Back Better, which will increase government spending on intangible endeavors.
They are also making preparations to enter into a gratuitous war with Russia over the Ukraine border.
In conclusion, the Biden administration is almost like an obscene parody of a government clueless about how it caused catastrophes and even more clueless about how to resolve them.
This has even caused skeptics to wonder if it is all being done on purpose to ruin the nation and rebuild it as a welfare state.
Irrespective of the motives, this has caused the future of the country to be similar to a kite dancing in a hurricane.
Photo credit: YouTube screen grab (cropped).