The Biden administration is downplaying the risk of inflation. They do not have any good answers for the fruits of their money printing adventure.
For a brief, heady moment, the socialist Democratic Party thought they could print unlimited amounts of greenbacks to fund their great socialist adventure in fundamentally transforming American into a high-tax, welfare state. They had planned to give out trillions more in payoffs to extreme left groups like the abortion factory, Planned Parenthood, along with fat checks to Green New Deal pet projects.
Some of Biden’s advisors actually believe a thing called Modern Monetary Theory (MMT), which is not so much a theory as it is some wet dream New York Times columnist Paul Krugman had. The proponents of MMT actually argue that we can use helicopters to dump barrels of money on cities across America. As a result, we would bring people out of poverty, and stimulate the economy, and some other foolish nonsense that should have been slapped out of them when they were five years old.
To keep inflation under control, the Federal Reserve raises the interest rate, thereby tightening the availability of money in circulation. Contrast this with when the economy is in a recession or depression and the Fed lowers the interest rate to increase the availability and access to money. Ever since the 2008 crash, the Fed has been proactive and does not wait for these events to happen. The Fed will lower or raise the interest rate in anticipation of adverse market developments.
Now that politicians and bankers understand the ability of the Fed to help chart the U.S. economy through rockier waters, both have gotten greedy in thinking that free money can be had to juice the economy (unlimited welfare for the Democrats, and a permanent sugar-high for the stock market).
Alas, maybe economics is a science after all because it appears the iron-clad rules of monetary policy still apply. Biden’s socialist dream is crashing back down to earth on the simple fact that you just can’t print unlimited amounts of paper money without commensurate production and wealth creation that comes with it.
Venezuela learned this lesson under Hugo Chavez. Weimar Germany learned this lesson with the Deutschmark. Argentina has learned the hard lesson of inflation several times over the past century. Now it is the Democrats’ turn in the barrel.
You can enjoy a moment of schadenfreude at the Democrats’ expense today, as their multi-trillion-dollar socialist program unravels and AOC cries herself to sleep over the cow farts that weren’t banned and the cross-Atlantic railways that weren’t built. Bernie Sanders planned on using some of the funny to buy his seventh vacation home — if you think he is grumpy now just wait until he learns that we have to turn off the money spigot.
It is only a matter of time before the Fed raises interest rates, with some observers targeting 2023 or sooner. The stock market party is over folks, and so is the Squad’s dream of building free housing for every one of the 100,000 illegal immigrants that Biden let trample into America last month through our open border.
Biden was handed the greatest economy in the world, which was burning rubber in place just waiting to take off and soar once the lockdowns were lifted. Instead, Biden’s welfare state is encouraging America’s robust population of welfare queens to lay on their couch.
When they thought they were throwing Americans a life preserver, Biden and the Democrats’ American Rescue Plan (ARP) instead threw a lead anchor into the already seaworthy vessel of the American economy and blew a hole through the bottom of the boat. Mayday. It is May, after all. Like so many things, the Democrats had the branding right but the fundamentals did not pass the smell test. It is hard to know when your policies stink when your snout is snuck up in the air all of the time as you busily call everyone who disagrees with you “wrong” and “racist.”
These socialists knuckleheads deserve every bit of the shellacking they have coming for them. Unfortunately and unfairly, it is going to be the American people who suffer first with higher prices for everything from food staples to gasoline. After watching inflation moths eat through your pocketbook, inflation rats eat through your food cabinet, and inflation termites eat through your home value, the American people will have to then turn around and punish the Democrats for their reckless money printing adventure.
Hope those “stimmy” checks were worth it, folks. “Nothing is free” should be the 11th Commandment.
If Biden and the socialist Democrats’ money printing adventure continues, the is a real risk that the American dollar could go the way of the Zimbabwe and monopoly money (In Hasbro We Trust) and be as worthless as the toilet paper in your bathroom. Except for the roll with Nancy Pelosi’s face on it. As Mastercard says: that’s priceless