Why is inflation so out of control? Most blame must go to the government. As round after round of COVID relief was passed by both parties with scant consideration, we warned that government was sending money to chase goods and services that, because of pandemic lockdowns, were no longer being produced in such great numbers. This is the definition of inflation, a growth in the money supply that exceeds growth in the value of goods and services available for purchase.
The United States is also suffering an inflationary labor shortage, thanks largely to the Biden administration’s misuse of supplemental federal unemployment funds to create perverse incentives. Because workers can make more money by collecting benefits through August than by returning to lower-wage jobs, productivity lags while Washington pumps more money into the market, whether it be borrowed government funds or lavish bonuses companies are forced to pay to get fast-food workers to show up consistently for a few months.
The last thing needed now is the Democrats’ proposed $3.5 trillion reconciliation package, a bill that costs more by itself than all combined federal revenues from last year. It is stuffed with irrelevant far-left policies that couldn’t survive politically in a national infrastructure package. It includes such gems as a massive expansion of a Medicare program that is already going bust.