Biden Inflation

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It never ceases to amaze me that the Biden Administration takes absolutely no blame for the inflation presently affecting us as a nation. That inflation is at about 7%, said to be the highest in a generation.

Every first year economics student understands that inflation is caused by an increase in the money supply. In fact, that is the definition of inflation. Look at it this way: When there is an increase in the supply of money with no increase in product the price has to rise. If you have 100 dollars to buy 100 product the price of each will be one dollar. But, if you have 200 dollars to buy the same product the price of each will be two dollars.

Rising prices are not inflation. Rising prices are the result of inflation.

Governments are financed a number of ways. Commonly governments are financed by raising taxes. But raising taxes is never popular. The government can print more money and no one complains, at least, not until prices begin to rise. Inflation also “steals” our savings and wage increases.

And prices are rising. Some are rising as much as 20%. Gasoline is the worst with the price today nearly twice what it was a year ago.

So, the Biden administration is blaming the meat producers for increasing meat prices. It is blaming “greedy” oil producers for rising gasoline prices.

Of course the Biden energy policies have also affected the price of fuel; the closing of work on the Keystone XL Pipeline, stopping drilling for oil on public lands, and stopping exploratory work in the Arctic National Wildlife Refuge. These Biden measures have been put in place supposedly to control climate change, which, as it turns out, is a non issue.

Now, few people are going to complain about the Biden economic policies when they receive bonus checks of several hundred dollars, even when those checks are financed simply by printing more money.

When you think about it you feel that on Biden’s staff there must be someone who understands basic economics. Well, it turns out that 17 Nobel Prize economists happen to agree with him.

Here is their statement:

The American economy appears set for a robust recovery in part due to active government interventions over the past year and a half, including President Biden’s American Rescue Plan. But, reversing years of disinvestment in public goods and addressing the country’s long-term needs—including building toward sustainable and inclusive growth and facilitating our clean energy transition—will require more.

Success in the 21st century will require building upon the bi-partisan infrastructure deal that has passed the Senate. The President’s Build Back Better agenda employs a broader conception of infrastructure by making critical investments in human capital.

While we all have different views on the particulars of various economic policies, we believe that key components of this broader agenda are critical. Because this agenda invests in long-term economic capacity and will enhance the ability of more Americans to participate productively in the economy, it will ease longer-term inflationary pressures.

Signed by 17 recipients of the Nobel Memorial Prize in Economic Sciences:

  • George A. Akerlof, Professor, Georgetown University
  • Sir Angus Deaton, Professor, Princeton University
  • Peter Diamond, Professor, Massachusetts Institute of Technology
  • Robert Engle, Professor Emeritus and Co-Director of the Volatility and Risk Institute, New York University
  • Oliver Hart, Professor, Harvard University
  • Daniel Kahneman, Professor, Princeton University
  • Eric S. Maskin, Professor, Harvard University
  • Daniel McFadden, Professor, University of California, Berkley
  • Paul Milgrom, Professor, Stanford University
  • Roger Myerson, Professor, University of Chicago
  • Edmund S. Phelps, Professor and Director of the Center on Capitalism and Society, Columbia University
  • Paul Romer, Professor, New York University
  • William Sharpe, Professor Emeritus, Stanford University
  • Robert Shiller, Professor, Yale University
  • Christopher Sims, Professor, Princeton University
  • Robert Solow, Professor Emeritus, Massachusetts Institute of Technology
  • Joseph Stiglitz, Professor, Columbia University

The above was found at the following location:

https://www.epi.org/open-letter-from-nobel-laureates-in-support-of-economic-recovery-age

Look at the list. These are mainly professors at liberal universities; universities that are often far removed from reality on economic principles.

Jim Hollingsworth has a master’s degree from Pensacola Christian College. He receives mail at: jimhollingsworth@frontier.com He has written four books: Climate Change: A Convenient Truth; Cortez: A Biography;The Ancient Culture of the Aztec Empire; Abortion Compassion, available wherever books are sold.

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