Preparing For the November Elections Limits Biden’s Choices on Inflation

We have only few months to the midterms elections, and our ‘beloved’ President Biden and his administration are limited in their options. Biden’s support ratings remain stagnant at about 40%, which might foreshadow Democratic doom, come autumn.

Rising Prices

Bill Hoagland, executive vice president of the Bipartisan Policy Center, said the government has a difficult task. “I don’t think they can do much short of implementing price restrictions. I don’t think we’ll go there.”

Consumer prices rose 7.9% in February, adding to the country’s inflation concerns. It hasn’t been that high since early Reagan, and it was just 1.7% in February 2021.

Officials from the Biden administration met with logistics executives Tuesday morning to begin a data-sharing effort to speed up shipments. Less money spent on things means more money spent on services like movies, haircuts, and vacations.

While the Federal Reserve is expected to raise interest rates by seven times this year, doing so too quickly could send the economy into a slump.

Inflation stopped Biden from pursuing the failed Build Back Better Act’s goals since moderate members fear its inflationary consequences. According to others, the $1.9 trillion American Rescue Plan contributed to the present levels.

The funding measure passed without Republican backing in March 2021. The plan featured direct payments to people, greater unemployment benefits, a child tax credit, higher food stamp perks, and $350 billion for local and state governments.

Blaming the War in Ukraine

Earlier this week, Biden blamed the COVID-19 outbreak and Putin’s assault on Ukraine.

However, economists differ.

“Whether it’s the Trump or Biden administrations, fiscal stimulus has raised salaries where demand outstripped supply,” Hoagland said.

In a recent survey, people indicated the Republican Party could better restore the economy and increase the country’s quality of life, while lowering crime and inflation. If present trends continue, the GOP may control both congressional chambers.

This week, the Fed will announce its first rate hike in years. After the epidemic began, the central bank loosened monetary policy by lowering its interest rate objective to zero and buying enormous amounts of government bonds.

Now, the monetary authority is reversing such efforts to combat inflation, but overreacting might derail the economy.

A senior fellow at the conservative American Enterprise Institute, Desmond Lachman, predicts 8.5 percent inflation next month, due to gas price increases related to Ukraine. He doesn’t notice any improvement before the collapse.

“Either you have strong inflation going into the election, or the Fed smashes inflation and the economy,” he added.

Even if the economy is going down, inflation can’t be stopped. This led to stagflation, which happened in the 1970s.

“They have to be extremely careful not to tip us from growth to a recession,” Hoagland added. “This is a pretty careful landing.”

What looms for the Democrats is defeat in the midterms; that much is clear.