Recent indications from the White House have deceived the American public on just how bad inflation is and will likely be in the coming months, even years. Prices for common goods and services have skyrocketed as a result of Biden’s massive spending, regulation, and use of Executive Order to halt free enterprise.
This week the administration off-handedly admitted that the inflation problem seen in the United States today will likely last as the Democrats prepare another round of massive spending efforts.
Inflation was expected given the relief spending as a result of the global pandemic, but no one predicted it could get this bad. The Biden administration seems unconcerned, ignoring the reality of who is affected by such massive price hikes — the American people.
According to the Bureau of Labor Statistics, the Consumer Price Index (CPI) for may showed that the rate of inflation jumped 5.4% from this time last year. This increase has yet to be seen since the Great Recession and financial crisis of 2008.
Always seeking a place to plant their blame, the White House insists that a majority of the inflation (60%) stems from a severe semiconductor shortage amid a major demand by the auto industry.
Cars once again accounted for a large share of the increase. Used cars, new cars, auto parts, and car rentals together made up about 60 percent of core month-over-month inflation 2/ pic.twitter.com/SeYSQZXRjy
— Council of Economic Advisers (@WhiteHouseCEA) July 13, 2021
The Biden administration previously identified semiconductors as one of four areas with major supply chain deficiencies. Still, Biden’s economic advisers have publicly stated they do not predict the deficiency to last — a far cry from current inflation messaging.
And how did the Biden administration attempt to combat the shortage of semiconductors? They did exactly what all Democrats do — throw taxpayer money at the situation. Biden committed to providing a half-billion dollars in taxpayer money to “save” the semiconductor industry from collapse, even though the free market would have corrected this issue on its own.
What was said to be a short-lived, temporary jump in inflation is now being sold to the American people as a possible two-year debacle. A recent report published by CEA chairwoman Cecilia Rouse and economists Jeffrey Zhang and Ernie Tedeschi revealed that the current inflation problem is likely to last for years.
The White House published the report despite the mixed messaging:
The economists concluded the current inflationary period is a result of massive spending not seen since World War II.
The article does note that “no single historical episode is a perfect template for current events” but did eventually conclude that “the inflationary period after World War II is likely a better comparison for the current economic situation than the 1970s and suggests that inflation could quickly decline once supply chains are fully online and pent-up demand levels off.”
The White House sent a much more visible signal on inflation Tuesday when former Treasury Secretary Larry Summers met with Deese and Rouse at the White House.
Scoop: Former Treasury Secretary Larry Summers was at the White House today meeting with top economic advisers Brian Deese and Cecilia Rouse. He’s been raising alarms about inflation for months and visit came on the day when surging June inflation numbers were reported.
— Jennifer Epstein (@jeneps) July 13, 2021
Summers has heartily criticized much of Biden’s legislative agenda, including the $1.9 trillion American Rescue Plan and both of his infrastructure proposals. He argues those spending levels, coupled with the Federal Reserve Board’s maintained zero-percent interest rates, will bring on rampant inflation.
The White House previously shrugged off his critiques.
Jason Furman, former CEA chairman for former President Barack Obama, spelled out a massive inflation warning on Twitter:
A MASSIVE divergence of inflation between the US and Euro area right now. I'm showing the 24-month change in core CPI (annualized) because this avoids any base effects.
Part of this is the US opening sooner/faster, but likely only part. pic.twitter.com/VkScwF7RV8
— Jason Furman (@jasonfurman) July 13, 2021
And yes, as I've said before, inflation is too low in the euro area. They're not doing nearly enough to recover.
— Jason Furman (@jasonfurman) July 13, 2021
Author: Asa McCue
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