Biden’s policies have created high inflation, runaway deficits, supply chain issues and excess demand.
It is hard to imagine that economic conditions can worsen at a faster rate than they have during President Biden’s first nine months in office. His policies and those of the very accommodating Federal Reserve (Fed), have led to disastrous results that can be best described as very yucky.
According to Merriam-Webster, yucky means to be repugnant, distasteful, unpleasant, and disagreeable. I believe that perfectly describes the current and, at least near future, of the economy. In the current fourth quarter, the yuckiness will worsen. If the ridiculously large and really mostly counter-productive massive spending bills are passed, the yuckiness will last for years.
Let’s start with the most serious current problem. Inflation has been running at a 6.5% annual rate since the first of this year. It is likely to accelerate in October, November and December. That means for the entire year, inflation will be in the 7% to 7 ½% range. After all of the credibility that the Fed has built over the last four decades, they irresponsibly allowed this repugnant event to occur.
In spite of very biased opinions to the contrary, inflation is very unpleasant. As President Reagan said, “Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hitman.”
Inflation is felt the hardest by the lowest income earners who, unlike higher-income earners, must spend nearly all of their disposable income on consumption Longer term, inflation leads to workers asking for wage increases that exceed the inflation rate since anything less is not a real raise.
That leads to businesses having to raise prices, which worsens inflation. This wage-price spiral is very difficult to end.
Biden’s policies and the irresponsible, maybe politically biased Fed, are completely responsible for the inflation.
Since the economy is now producing goods and services at a rate that exceeds the level prior to the pandemic, in the aggregate, supply chain disruptions can not be the major cause of inflation.