{"id":1292235,"date":"2022-02-11T13:44:14","date_gmt":"2022-02-11T18:44:14","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1292235"},"modified":"2022-02-11T18:52:48","modified_gmt":"2022-02-11T23:52:48","slug":"bidens-inflation-is-only-the-beginning-the-real-problem-is-far-far-worse","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/bidens-inflation-is-only-the-beginning-the-real-problem-is-far-far-worse\/","title":{"rendered":"Biden\u2019s Inflation Is Only The Beginning. The Real Problem Is Far, Far Worse."},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">26<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fbidens-inflation-is-only-the-beginning-the-real-problem-is-far-far-worse%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1292235&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div><img decoding=\"async\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/02\/A96031A9-0692-44E3-BB14-45A406F8BA0A-scaled-1-1.jpeg\" class=\"ff-og-image-inserted\" alt=\"image\" \/><\/div>\n<p class=\"s3\">President Joe Biden is in serious trouble.<\/p>\n<p class=\"s4\"><span class=\"s2\">In political terms, he has failed across the board: on foreign policy, he has surrendered Afghanistan to a ragtag gang of 8<\/span><span class=\"s5\">th<\/span><span class=\"s2\">-century tribal barbarians, incentivized a Russian invasion of Ukraine, and provided an opening for a Chinese invasion of Taiwan, all while making unrequited overtures to the terrorism-sponsoring Iranian regime; on domestic policy, he has pressed irrational COVID-19 restrictions on children, polarized Americans with foolish and illegal vaccine mandates, labeled his political opponents Jim Crow racists, and pursued radical social change on everything from gender ideology to anti-religious regulation.<\/span><\/p>\n<p class=\"s4\"><span class=\"s2\">But it is on the economic front that Biden has truly failed most dramatically.<\/span><\/p>\n<p class=\"s3\">\u200b<span class=\"s2\">Most of the consternation about Biden\u2019s economy has been focused on the unprecedented inflation Americans are currently experiencing. Not for four decades has inflation seen these levels: according to <\/span><a href=\"https:\/\/www.wsj.com\/articles\/us-inflation-consumer-price-index-january-2022-11644452274?mod=hp_lead_pos5\"><span class=\"s6\">The Wall Street Journal<\/span><\/a><span class=\"s2\">, \u201cA relentless surge in US inflation reached another four-decade high last month, accelerating to a 7.5% annual rate as strong consumer demand collided with pandemic-related supply disruptions.\u201d For his part, Biden chalks inflation up to supply chain issues connected with the COVID-19 pandemic \u2013 but as <\/span><span class=\"s2\">Santul<\/span> <span class=\"s2\">Nerkar<\/span><span class=\"s2\"> of <\/span><a href=\"https:\/\/fivethirtyeight.com\/features\/what-democrats-and-republicans-get-wrong-about-inflation\/\"><span class=\"s7\">FiveThirtyEight<\/span><\/a><span class=\"s2\"> points out, Europe \u201chas faced similar supply chain issues and an even worse oil shock\u2026And yet, European countries have experienced lower inflation, perhaps due in part to their smaller government response.\u201d <\/span><span class=\"s2\">Nerkar<\/span><span class=\"s2\"> adds that Biden\u2019s American Rescue Plan \u2013 absurdly credited by Rep. Hakeem Jeffries (D-NY) as a key factor in America defeating COVID&nbsp;<\/span><span class=\"s2\">\u2013&nbsp;<\/span><span class=\"s2\">contributed to inflationary pressures. <\/span><\/p>\n<p class=\"s3\">\u200b<span class=\"s2\">But conservatives are making a large-scale political and economic mistake if they believe that the chief threat to the American economy in the mid- to long-term is inflation. It isn\u2019t. It\u2019s thus worthwhile discussing the future of the American economy, with an eye toward precisely the question of timeline: what <\/span><span class=\"s2\">are<\/span><span class=\"s2\"> America\u2019s short, mid-range, and long-term threats economically? As we will see, the policy we pursue right now creates significant short-term danger \u2013 but the mid-range and long-term danger dwarf whatever pain we\u2019re experiencing right now.<\/span><\/p>\n<p class=\"s3\"><b><span class=\"s8\">Short-Term Problems: Inflation <\/span><span class=\"s8\">And<\/span><span class=\"s8\"> Unemployment<\/span><\/b><\/p>\n<p class=\"s3\">\u200b<span class=\"s2\">There is no question that inflation is a serious problem. <\/span><span class=\"s2\">That is due, in part, to supply chain issues \u2013 since February 2020, used cars and <\/span><span class=\"s2\">trucks <\/span><span class=\"s2\">have seen a 22.9 percent increase in price, compared to just 3.5 percent for core CPI; since February 2020, energy has risen 9.5 percent, compared to 3.0 percent for shelter. That\u2019s because of oil and gas shortages on the energy side, and chip shortages on the auto side. Over time, some of this should be alleviated.<\/span><\/p>\n<p class=\"s4\"><span class=\"s2\">It is also true that the Federal Reserve is likely to ratchet up interest rates in their next meeting; in fact, the markets are pricing in the significant possibility of an interest rate <\/span><a href=\"https:\/\/www.cnn.com\/2022\/02\/10\/business\/fed-inflation-rate-hikes\/index.html\"><span class=\"s7\">increase of 50 basis points<\/span><\/a><span class=\"s2\">.<\/span> <a href=\"https:\/\/www.cnn.com\/2022\/02\/10\/business\/fed-inflation-rate-hikes\/index.html\"><span class=\"s7\">According to CNN<\/span><\/a><span class=\"s2\">, Bank of America<\/span><span class=\"s2\"> \u2013 admittedly an outlier \u2013<\/span><span class=\"s2\">&nbsp;is calling for no less than seven rate hikes this year.<\/span><span class=\"s2\"> In any case, the Federal Reserve understands that its mandate is to rein in inflation, and we should probably foresee that it will do so quickly.<\/span><\/p>\n<p class=\"s4\"><span class=\"s2\">Biden\u2019s overheated economy \u2013 his overspending, his promotion of loose monetary policy \u2013 <\/span><span class=\"s2\">could<\/span><span class=\"s2\"> have serious short-term consequences. Consumer sentiment has tanked to its worst state since October 2011. A huge part of that is inflation concern: <\/span><a href=\"https:\/\/news.yahoo.com\/u-consumer-sentiment-falls-fresh-151419313.html\"><span class=\"s7\">consumers say they expect<\/span><\/a><span class=\"s2\"> an annual inflation rate of 5 percent in 2022.<\/span><\/p>\n<p class=\"s4\"><span class=\"s2\">In the early 1980s, Fed Chair Paul Volcker famously increased interest rates, and unemployment jumped to 10 percent.<\/span><span class=\"s2\"> It\u2019s unlikely that increasing interest rates to the extent discussed right now will have similar effects \u2013 Volcker increased interest rates to 20 percent, not from zero percent to one percent. But it would not be surprising to see some turn in the employment market thanks to Federal Reserve policy changes.<\/span><\/p>\n<p class=\"s3\"><b><span class=\"s8\">Mid-Term <\/span><span class=\"s8\">and Long-Term <\/span><span class=\"s8\">Problem<\/span><span class=\"s8\">s<\/span><span class=\"s8\">: <\/span><span class=\"s8\">Debt <\/span><span class=\"s8\">And<\/span> <span class=\"s8\">Stagnation<\/span><\/b><\/p>\n<p class=\"s3\">\u200b<span class=\"s2\">Inflation is <\/span><span class=\"s2\">a problem.<\/span><\/p>\n<p class=\"s3\">\u200b<span class=\"s2\">But the far more <\/span><span class=\"s2\">serious danger<\/span><span class=\"s2\"> to the economy is stagnation. <\/span><\/p>\n<p class=\"s3\">\u200b<span class=\"s2\">In the 1980s, Japan was seen as a serious economic contender on the world stage. From \u201c<\/span><span class=\"s9\">Die Hard\u201d&nbsp;<\/span><span class=\"s2\">to Michael Crichton\u2019s \u201c<\/span><span class=\"s9\">Rising Sun<\/span><span class=\"s2\">,\u201d the going theory was that Japan would soon compete for dominance with the United States. Then, the Japanese economy cratered \u2013 and it still hasn\u2019t recovered. What happened? <\/span><span class=\"s2\">At the end of the 1980s, the Japanese real estate bubble burst, and the Japanese government immediately engaged in Biden-style economic \u201cstimulus.\u201d In 2001, the Bank of Japan attempted to spur the economy through inflationary monetary policy. <\/span><a href=\"https:\/\/www.heritage.org\/budget-and-spending\/report\/avoid-european-and-japanese-economic-stagnation-us-should-adopt-more\"><span class=\"s7\">According to the Heritage Foundation\u2019s James Roberts and Danielle <\/span><span class=\"s7\">Lacalle<\/span><\/a><span class=\"s2\">, \u201c[b]<\/span><span class=\"s2\">etween<\/span><span class=\"s2\"> 1991 and late 2008, Japan spent $6.3 trillion on \u2018construction-related public investment,\u2019 which significantly contributed to the country\u2019s stagnation, high debt, and weaker productivity growth.\u201d Japan now holds an extraordinary level of public debt, which amounts to more than 250 percent of GDP. Fully one-quarter of the budget goes to interest payments on the debt. Japan also has large shortfalls in terms of pensions, <\/span><span class=\"s2\">despite the fact that<\/span><span class=\"s2\"> Japan has cut its pensions multiple times. Since 1991, Japan\u2019s GDP growth has exceeded 3 percent precisely twice<\/span><span class=\"s2\">, in 1996 and 2010.<\/span><\/p>\n<p class=\"s3\">\u200b<span class=\"s2\">If this sounds familiar, it should.<\/span><\/p>\n<p class=\"s3\">\u200b<span class=\"s2\">The United States\u2019 debt-to-GDP ratio has exploded since the advent of the Obama presidency \u2013 and then it went exponential during COVID-19. According to the <\/span><a href=\"https:\/\/fred.stlouisfed.org\/series\/GFDEGDQ188S\"><span class=\"s7\">Federal Reserve Bank of St. Louis<\/span><\/a><span class=\"s2\"> the U.S. debt-to-GDP ratio expanded from 64.1 percent in the first quarter of 2008 to 82 percent by the third quarter of 2009; it expanded again to 105 percent of GDP by the time Barack Obama left office; it was only 108 percent before COVID, but now has jumped to 122 percent of GDP. We already spend <\/span><a href=\"https:\/\/www.crfb.org\/papers\/how-high-are-federal-interest-payments\"><span class=\"s7\">$300 billion per year<\/span><\/a><span class=\"s2\"> on net interest payments. As we increase interest rates, we also increase our interest payments on the debt we take out. <\/span><a href=\"https:\/\/www.nytimes.com\/2022\/02\/01\/us\/politics\/national-debt-30-trillion.html\"><span class=\"s7\">The Congressional Budget Office<\/span><\/a><span class=\"s2\"> says that net interest costs are likely to amount to 8.6 percent of total GDP in 2051 \u2013 about $60 trillion in total interest payments over the next thirty years. The Committee for a Responsible Federal Budget suggests that should interest rates rise, we will be paying $948 billion <\/span><span class=\"s9\">per year<\/span><span class=\"s2\"> in interest on the debt by 2031 \u2013 almost a quarter of our current budget amount.<\/span><\/p>\n<p class=\"s3\">\u200b<span class=\"s2\">It isn\u2019t just a pure spending problem, of course. Biden is also pursuing economic policies that breed stagnation: redistribution of income away from investment and innovation and toward <\/span><span class=\"s2\">cronyistic<\/span><span class=\"s2\"> labor unions; regulations via the Securities and Exchange Commission that crack down on how private equity and venture capital operate; <\/span><span class=\"s2\">crackdowns on particular businesses that tend to rub Biden the wrong way (see Musk, Elon) or that simply seem like fat targets (see Amazon and Facebook)<\/span><span class=\"s2\">; useless, massive <\/span><span class=\"s2\">investments in fighting \u201cclimate change\u201d; <\/span><span class=\"s2\">wasteful and ugly governmental discrimination via \u201cdiversity, equity, and inclusion\u201d plans<\/span><span class=\"s2\">. <\/span><\/p>\n<p class=\"s4\"><span class=\"s2\">Stagnation isn\u2019t merely predictable \u2013 <\/span><span class=\"s9\">Biden has already predicted it<\/span><span class=\"s2\">. In pushing the failed Build Back Better plan, the White House projected economic growth of 2 percent or less every year for \u201cmost of the next decade, after factoring in inflation,\u201d <\/span><a href=\"https:\/\/www.politico.com\/news\/2021\/05\/28\/biden-budget-slow-economy-growth-491341\"><span class=\"s7\">according to Politico<\/span><\/a><span class=\"s2\">. That, too, is no surprise \u2013 it\u2019s in line with CBO predictions, which suggest 1.6 percent growth after the COVID-19 recovery.<\/span><\/p>\n<p class=\"s3\">\u200b<span class=\"s2\">If our economy doesn\u2019t increase dramatically, our burdensome debt is going to loom larger and larger faster and faster. <\/span><span class=\"s2\">After all, we need to suck money out of the private markets to pay for our extensive, burdensome, and counterproductive public sector. <\/span><span class=\"s2\">And that <\/span><span class=\"s2\">problem will<\/span><span class=\"s2\"> be exacerbated by Biden\u2019s love for taxation<\/span><span class=\"s2\">, which he adores on principle \u2013 if America had a quarter for every time Biden characterized higher taxes as \u201cpatriotic,\u201d we could actually relieve the national debt.<\/span><span class=\"s2\"> But such taxation reduces innovation and investment, precisely the vehicles Americans require for economic growth. That is particularly true of Biden\u2019s desired increases in corporate and capital gains taxes. Even without <\/span><span class=\"s2\">active Democratic rollbacks of the Trump tax rates, <\/span><span class=\"s2\">Trump\u2019s tax cuts <\/span><a href=\"https:\/\/thehill.com\/policy\/finance\/586847-trumps-tax-law-hits-four-year-anniversary-in-a-safer-spot\"><span class=\"s7\">expire for most individuals at the end of 2025<\/span><\/a><span class=\"s2\">. <\/span><\/p>\n<p class=\"s3\"><b>Conclusion<\/b><\/p>\n<p class=\"s3\">\u200b<span class=\"s2\">Nothing grows the economy like actual economic growth. Yet for years, America\u2019s economic policymakers have delegated more and more power to the Federal Reserve \u2013 and in doing so, have made economic policy dependent on fiscal policy. That\u2019s been a large-scale mistake. It\u2019s been a far larger mistake for the federal government to accelerate its suicidal economic plans during COVID-19 \u2013 at the beginning of the pandemic, perhaps such measures could have been justified. But by now, it\u2019s clear that the federal government\u2019s economic policy has done unparalleled damage to America\u2019s mid-term and long-term economic health. And if Joe Biden succeeds in his plans, that damage will only grow worse.<\/span><\/p>\n<p><i>The Daily Wire\u2019s first original film, Shut In, has made its cinematic debut, being met with rave reviews. The Daily Wire is building an alternative to the leftist entertainment industry, one gripping movie at a time. Join us in this mission and stream Shut In today by&nbsp;<a class=\"gmail-c-link\" tabindex=\"-1\" href=\"https:\/\/www.dailywire.com\/subscribe-shutin?utm_campaign=shutin&amp;utm_medium=editorial&amp;utm_source=facebook&amp;utm_content=subscribe_shutin&amp;utm_talent=dailywire\" target=\"_blank\" rel=\"noopener noreferrer\">becoming a Daily Wire member<\/a>.<\/i><\/p>\n","protected":false},"excerpt":{"rendered":"<p>President Joe Biden is in serious trouble.In political terms, he has failed across the board: on foreign policy, he has surrendered Afghanistan to a ragtag gang of 8th-century tribal barbarians, &#8230;<\/p>\n","protected":false},"author":1,"featured_media":2315279,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1292235","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1292235","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1292235"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1292235\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2315279"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1292235"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1292235"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1292235"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}