The truth of the matter is very different. Last year’s reckless budget and monetary policy must bear a large part of the responsibility for today’s inflation troubles. In March 2021, at a time the economy was recovering strongly and had already received $3 trillion in bipartisan budget support in response to the pandemic, President Biden rushed through Congress his $1.9 trillion American Rescue Plan.

As a result, never before in peacetime had the economy received such a large amount of budget stimulus.

Similarly, at a time when inflationary pressures were very much in evidence and the economy was receiving record budget stimulus, the Federal Reserve kept its pedal to the monetary policy metal. It did so by keeping interest rates at their zero bound, letting the broad money supply increase at its fastest rate in the past 50 years, and buying a staggering $5 trillion in US Treasury bonds and mortgage-backed securities.

The net upshot is that our economic policymakers have helped put us in a poor position to weather the Russian oil and food price shock that we are in the midst of experiencing. That is especially the case when that shock has resulted in a more than two-thirds increase in international oil prices since the start of the year to their current level of $125 a barrel. This will leave the Federal Reserve with little option but to slam on the monetary policy brakes to prevent inflation from getting out of control. That in turn could very well snuff out the economic recovery and bring on an economic recession.