The Democrats would have us believe inflation is not too bad. Late last year they were even claiming that it’s “transitory” or temporary. That has become typical of how bad the Democrats are missing the mark on so many of their objectives.
If you want to know how scary our current inflation is becoming, consider remarks made this past Saturday by President Neel Kashkari of the Minneapolis Federal Reserve Bank. Inflation is “higher that we expect. And it’s not just a few categories. It’s spreading out more broadly across the economy,” he told CBS.
Kashkari also said something everyone, except the Democrats, seem to understand. The costs of goods and services are going up so fast, he said, workers are experiencing a “real wage cut.”
There are two principle reasons for inflation. Joe Biden has greatly cut our nation’s oil production, which has caused a huge increase in energy costs and this in turn is driving up prices. Combine skyrocketing energy costs with the creation of way too much money by government overspending and old Joe has created an almost perfect inflationary storm.
Inflation inevitably leads to problems. Usually, it requires the Federal Reserve to increase interest rates to slow the economy. This the Feds are doing and putting a great deal of pressure on the housing market. The demand for homes — both new and existing — is down. This is slowing an already slowing economy. Our economy for the first two quarters of this year has contracted. That’s always been defined as a “recession.” But not for the Democrats. They say there is still a lot of job growth and we’re not in a recession.
Let’s look at the facts. We’ve had two quarters of negative growth and in the third quarter, which began July 1, the rosy forecasts are headed south. One of the most reliable forecasters of the economy is GDP Now, a service of the Federal Reserve Bank of Atlanta. On Monday of this week, GDP Now said the economy for the third quarter would grow 1.3 percent. Three days earlier the same folks were saying the economy was growing at a pace of 2.1 percent. What’ll the forecast be in two weeks?
The Democrats’ claim of dynamic job growth is a myth. In the not-too-distant past, workers in the automotive business in St. Louis — those that assemble vehicles and those that make parts for the assembly plants — often got more overtime than they wanted. Today they struggle to get 40 hours and down the road some are looking at layoffs.
The Democrats could help our inflation problem by promoting the production of oil. But that’s not going to happen. They could also hold the line on spending. That’s probably less likely than increasing oil production. The new Schumer-Manchin bill that is expected to pass the Senate this week calls for immediate spending, but revenue increases phased in over six years. Doesn’t that sound exactly like the smoke and mirrors we’ve seen for years?
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