Prices continued to surge in March, with experts telling the Daily Caller News Foundation that runaway federal spending is the main issue but disagreeing on how quickly reductions in expenditures by the Biden administration could affect inflation rates.
Inflation rose 3.5% year-over-year in March, ticking up from 3.2% in February, far from the Federal Reserve’s goal of 2%. Surging inflation is largely the result of high levels of government deficit spending, which has continued under President Joe Biden, with economists disagreeing on how quickly the president could reel in inflation if the correct measures are taken. (RELATED: Small Business Optimism Drops To More Than 11-Year Low As Inflation Crushes Americans)
“Unfortunately, the cures for inflation will take time to have an effect so there’s little that the Biden administration can do,” E.J. Antoni, a research fellow at the Heritage Foundation’s Grover M. Hermann Center for the Federal Budget, told the DCNF. “The same is true for the Fed with the added caveat that their actions will not only take time to deliver benefits but will first deliver more pain.”
The national debt is currently over $34.6 trillion as of Monday, rising from around $27.8 billion as of January 2021, when Biden first took office, according to the Treasury Department. Biden has pursued a number of high-spending policies as part of his agenda, including the American Rescue Plan, which added $1.9 trillion in spending, and the Inflation Reduction Act, which added another $750 billion in new appropriations.
“Today’s data shows inflation has fallen over 60% from its peak, but we have more to do to lower costs,” Biden said in a post on X following the report. “My plan would lower the cost of housing by building and renovating 2 million homes, and I’m calling on corporations with record profits to pass their savings to consumers.”
Prices, on average, have risen a total of 18.9% since January 2021, according to the Federal Reserve Bank of St. Louis. Inflation peaked under Biden in June 2022, rising 9% year-over-year.
“That being said, Biden could immediately end his war on reliable American energy, which would send a signal to commodity markets that production will increase,” Antoni told the DCNF. “That would prompt speculators to trade at lower prices, which would translate into lower consumer prices in a matter of weeks or months. That is not a strictly deflationary effect in the academic sense, because it doesn’t affect the value of the currency. Nonetheless, energy affects the price of everything we do and everything we buy, so the result is nearly the same.”
The Biden administration has been particularly hostile to the production of energy commodities, arguing that they contribute to climate change and curbing fossil fuel use in exchange for alternatives like solar and wind energy. Under Biden, agencies have restricted the leases granted to oil companies, curtailing domestic production and limiting supply, affecting the cost of every business that requires energy to operate.
The price of fuel oil has increased 44.6% since Biden first took office, down from a peak of 99.1% experienced in May 2022 following the start of Russia’s invasion of Ukraine, according to FRED.
BLS releases hot CPI and now ATL Fed revises down GDP nowcast…
Inflation: faster
Growth: slower
Say it w/ me: stagflation pic.twitter.com/UoptaylTDe— E.J. Antoni, Ph.D. (@RealEJAntoni) April 10, 2024
Alfredo Ortiz, CEO of the Job Creators Network, disagreed on how quickly the rate of inflation could be reduced, telling the DCNF that reversing Democratic policies could provide relief for average Americans quickly.
“Robust pro-growth policies that reverse Democrats’ failing agenda can quickly bring inflation back under control,” Ortiz told the DCNF. “Due to Democrats’ reckless spending, the nation is on track for a $2 trillion deficit this year, putting upward pressure on costs. Legislation that brings spending back to pre-pandemic levels can eliminate this cost driver.”
Ahead of this month’s inflation announcement, Federal Reserve Chair Jerome Powell indicated that it was too soon to say whether the current uptick in inflation was indicative of persistently elevated inflation, according to The Hill. In response to high inflation, the Fed has placed its federal funds rate in a range of 5.25% and 5.50%, with a majority of investors predicting rate cuts this year despite persistently elevated inflation readings.
“If you consider that the Fed today has essentially become a captive of the Treasury and so all deficits are more or less monetized, then the excess spending under Biden, including the misleadingly named IRA, is directly responsible for the inflation we face today.”
The White House did not respond to a request to comment from the DCNF.
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