Looks Like Trump Is To Blame For Rampant Inflation
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There’s no question that high levels of government spending can fuel
inflation. But the spending that has occurred since Biden took office, primarily through the American Rescue Plan, accounts for just a part of
new government spending over the past 18 months.
Other potential factors are also at play in raising prices: short-term
supply interruptions, labor shortages, tariffs on imported goods, or
simply the cyclical growth in consumer demand when the economy is
recovering from a downturn.
Economists looking at today’s inflation caution that the precise cause is
hard to pin down, and they vary on how much impact the most recent
spending is having.
But all of them underscore that heavy spending isn’t just a Biden administration phenomenon. It started over a year ago, as the government
tried to protect Americans and the economy from the ravages of COVID-19. Government spending
In reviewing Washington’s actions, we look at actual spending, rather
than
the maximum amount allowed under any measure. That’s because where
inflation is concerned, what matters is when the money gets into people’s pockets.
There have been several major coronavirus relief packages. The largest
was
the CARES Act, passed in March 2020 and signed by President Donald Trump. According to the Covid Money Tracker from the Committee for a Responsible Federal Budget, that bill has put $1.97 trillion into the economy to
date.
The CARES Act provided such pillars of federal aid as the Paycheck
Protection Program for companies and their workers, and expanded
unemployment benefits for the millions of people who lost their jobs.
Congress refilled the Paycheck Protection Program in April 2020, along
with other aid, at a cost of about $500 billion.
In December 2020, Congress passed additional relief, including $600
checks
for most Americans. About $770 billion has been spent so far.
The most recent bill was the American Rescue Plan Act championed by Biden
and congressional Democrats and signed in March 2021. So far, spending
from that has reached $1.05 trillion.
The U.S. Treasury Department’s COVID-19 page shows that overall, as of
the
end of May 2021, federal agencies had spent or committed about $3.5
trillion since the pandemic began. The Committee for a Responsible
Federal
Budget, using different methods, puts the latest tally at about $4.45
trillion.
There are other amounts that can be folded into the totals, but it’s safe
to say about two-thirds of the spending took place before Biden took
office.
"I wouldn't ascribe the government spending necessarily to Biden, as the increase in government spending to help curb the effects of COVID was
already occurring during the Trump administration," said Columbia
University economist Jennifer La’O. Inflation trends
Scott spoke of "six straight months of raging inflation." That’s an exaggeration. The consumer price index has been rising this year, but on
a
month-to-month basis, inflation didn’t start accelerating significantly
until March. (We look at month-to-month changes, rather than
year-over-year, because 2020 was such an unusual year.) Featured
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In January, prices went up 0.3%. February’s increase was 0.4%. That’s
lower than in June and July the year before.
But between March and June this year, the Consumer Price Index had an
average monthly increase of 0.7%.
The prices of some goods, such as gasoline and used cars, have gone up dramatically. Other increases are more modest, but they’re still
important
for household budgets. Grocery prices are up 0.9%. Clothing is nearly 5%
more expensive.
Across the board, the cost of living rose 0.9%. Economy watchers look
less
at that topline number, and more at what is driving it. It turns out the
used cars and trucks accounted for a third of the overall increase in the
CPI. Federal Reserve Bank chairman Jerome Powell said that’s unlikely to
last.
"Used car prices are going up because of sort of a perfect storm of very
strong demand and limited supply," Powell said at a June 16 news
conference.
A global shortage of semiconductor chips has curtailed vehicle production
and thinned new-car inventories, so more buyers have turned to used car
and trucks, pushing up prices in that market. Eventually, Powell said,
supply chains will get back on track and the surge will ease. That’s what happened with an earlier spike in lumber prices.
There is a risk of more deeply embedded inflation, but there are few
signs
of that so far. Biden, spending and inflation
Economics 101 holds that when you add hundreds of billions of dollars to
an economy, at least some people will go out and buy things. If supply
doesn’t ramp up at a commensurate pace, increased demand will lead to
higher prices.
Macroeconomist John Leahy at the University of Michigan thinks
Washington’s spending since last spring is fueling that type of cycle.
"The root cause of inflation is most likely the increase in aggregate
demand for goods, and this increase in demand has been caused in part by
the increase in government spending," Leahy said. "Supply bottlenecks
help
to explain why supply has not kept pace with demand, but they are not
prime mover."
Stanford University economist Peter Klenow has no quibble with that basic
idea, but he says he’s skeptical that much of this tracks back to Biden.
Klenow points to studies like one from the New York Federal Reserve that
found that only about 30% of stimulus money was spent on goods. About 70%
of the money went into savings or paid down debt. That money wouldn’t
spur
demand or lead to higher prices.
Klenow also doubts that a relief package passed in March 2021 would drive
up inflation just three months later.
"Estimates of the effects of government spending in earlier years
typically find a lag of a year or two between the spending and any
noticeable effect on inflation," Klenow said.
One final point on inflation and tax policy: Scott talked about
Democrats’
"tax and spending spree." While Biden has said he would like to raise
taxes on corporations and on people making over $400,000 a year, that has
yet to happen.
That aside, Leahy said that in the short run, taxes tend to trim demand,
and reduce inflationary pressures.
"Tax hikes on consumers reduce disposable income and thereby reduce
consumer spending," Leahy said. "Tax hikes on business tend to reduce
profits and thereby reduce investment. "
We reached out to Scott’s office to ask about the role of taxes and
Biden’s spending and did not hear back. Our ruling
Scott said, "Thanks to the insane tax-and-spending spree of President Joe
Biden and Democrats in Washington, we are seeing six straight months of
raging inflation."
Inflation is up, and there’s broad agreement that government spending has
been a factor.
However, most of the big spending coursing through the economy took place before Biden and the Democrats were in charge in Washington. In the past, there’s been a lag of one to two years between higher government spending
and higher inflation. The massive relief package in March has had little
time to spur inflation.
As for taxes, they haven’t gone up. And if they had, that would tend to
put the brakes on inflation.
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Joey Lamar Ellis
HOUSTON, Texas (KTRK) -- A former Houston park ranger accused of using apps to meet up with gay men to rob and sexually assault them was arrested during a court hearing on Tuesday.
Joey Ellis is now facing federal charges in the case.
He was in a court hearing for the charges he's facing in Harris County, which are two counts of official oppression and one count of sexual assault.
Federal prosecutors moved in to indict him on 20 counts, and the FBI said that they indicted him for repeatedly abusing his authority as a City of Houston Urban Park Ranger by stopping, detaining, and assaulting victims who were visiting city parks at
night.
A federal grand jury returned an indictment on Dec. 3, charging him with the 20 counts, which, they said, represent the accusations of civil rights violations perpetrated against eight victims.
They went on to say that in many instances, he allegedly confiscated the victim's driver's licenses or cell phones, threatened them to get towed, but then offered them a way out of getting arrested by either demanding money or sexual acts.
Ellis' lawyer says his client stands by his innocence, and they will continue to fight these allegations.
https://abc13.com/post/former-houston-park-ranger-joey-ellis-accused-targeting-gay-men-parks-facing-federal-charges/15638036/
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