(Article republished from Mises.org)
The United States’ insane inflation is solely due to out-of-control spending and currency printing. Corporations, wars, or supply chains cannot cause aggregate prices to rise, nor can they consolidate the increase even at a slower pace. Although this can have an impact on individual prices, the only factor that causes aggregate prices to rise year after year is the decline in the value of the US dollar that the government issues.
Over 20.5% accumulated inflation over the past four years, government deficit spending has reached nearly $2 trillion annually despite record tax receipts and a growing economy, public debt has reached almost $36 trillion, and the monthly job figure includes an astonishing 43,000 new government jobs each month. In 2023, nearly 25% of all job gains were government ones, and the entirety of the growth of the labor force in the past four years came from foreign workers. The latest jobs figure is so poor it seems disingenuous to blame it on hurricanes and strikes, as if economists and forecasters had not considered those two factors in their estimates. Furthermore, the only factor that continued to increase uncontrollably was the number of government jobs, adding 40,000 new positions to an overall total of just 12,000 jobs. No wonder the labor participation rate and employment-to-population ratios remain below 2019 levels. Furthermore, in the latest GDP figure, government spending accounted for 30% of the annualized growth, while investment was basically stagnant. In the past nine quarters, government spending has been one of the top drivers of GDP growth, and its contribution to GDP in the third quarter of 2024 was the largest in a year.
This is upside-down economics in full swing. Private sector investment weakness, higher taxes for the productive economy and government spending and debt driving the economy. Of course, this never ends well.
The Harris-Biden administration arrived in January 2021, when the economy was bouncing back strongly. Instead of allowing the private sector to thrive, it embarked on a strategy of out-of-control spending and tax increases with two objectives: increase the size of government in the economy so much that the next administration would be unable to reduce it enough in four years. The second objective was to bloat growth and job figures so aggressively that the next administration will see a recession if it reduces public sector growth. You may ask yourself why they would do it if Harris intended to win the elections. If Kamala Harris wins, she will continue to expand the size of government, inflate prices through spending and printing, and blame companies and stores for these actions.
Read more at: Mises.org
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