The Truth About Inflation That The Democrats Are Too Stupid Or Too Gutless To Tell People
What would the economy look like today if the Congress hadn’t (1) sent money back to taxpayers and (2) passed the infrastructure bill?
By David Grace (Amazon Page — David Grace Website)
What Is Inflation?
Oxford Dictionary definition of inflation: “A general increase in prices and a fall in the purchasing value of money.”
International Monetary Fund: “Inflation is the rate of increase in prices over a given period of time. Inflation is typically a broad measure, such as the overall increase in prices or the increase in the cost of living in a country.”
The Lower The Supply Of A Product In Relation To The Demand For That Product, The More The Price Of That Product Will Increase.
The Sanctions On Russia Related To The Invasion Of Ukraine Reduced The World Supply Of Oil
- If you decrease the supply of oil, the price of energy will increase.
The Russian Invasion Of Ukraine Reduced The World Supply Of Wheat
- If you decrease the supply of a basic foodstuff such as wheat, the price of wheat and all foods that use wheat will increase.
The Worldwide Chip Shortage Reduced The Supply Of New Vehicles
- If you decrease the supply of automobiles, the price of automobiles will increase.
The Supply Chain Failures Caused By COVID Decreased The Supply Of Foreign-Made Goods.
- If you decrease the supply of goods such as washing machines, refrigerators, etc. the price of those goods will increase.
An Increase In The Price Of A Fundamental Product Will Cause An Increase In The Price Of All Of The Other Products That Rely On That Fundamental Product.
An increase in the price of oil increases the price of electricity, gasoline, diesel fuel, and jet fuel — the price of energy.
All manufacturers, landlords, retail businesses, farmers etc. use energy both to build their products and heat their buildings, and also to transport their products to market. An increase in the price of energy causes the price of almost all products and services to increase.
An increase in energy prices increases the cost to grow, harvest, process and transport food. An increase in energy prices increases the price of food.
Sellers Will Raise The Price Of Their Products As High As Possible
The increase in the cost of energy and a decrease in available supplies provides sellers with the opportunity and the excuse to raise prices even higher than their costs have actually increased. Many sellers have raised prices materially higher than their costs have increased because supply shortages and market concentration have allowed them do get away with it.
An Increase In The Money Supply That Materially Exceeds An Increase In Real Assets Will Cause Inflation
Conservatives have blamed the spike in inflation solely on the government’s COVID-related spending.
Given
- the inflationary effects of the decrease in supply caused by supply-chain failures,
- the decrease in the world’s oil supply,
- the chip shortage and
- the unavailability of the Ukraine wheat crop
this is clearly a false claim, but, for the sake of argument, let’s say that some portion of the spike in inflation was caused by the government’s COVID-related spending — unemployment benefits, one-time payments to taxpayers, payroll-retention payments to employers, loans to employers, and infrastructure spending.
There Is Always A Cost Of Doing Business
If your car got hit by a meteor would you say, “Gee, I wish I hadn’t bought that insurance because now I have to pay the $500 deductible”?
No, you’d say, “Thank God I bought that insurance because even though that meteor destroyed my car I only had to pay $500 instead of $25,000 to replace it.”
Let’s say you are in a terrible accident. You could die. They put you in the ICU and a team of surgeons performs a series of operations and, thank God, they save your life!
When you’re finally discharged many weeks later your right leg is so stiff that you have to walk with a cane. They tell you that you’ll need several months of costly physical therapy before you will get back to where you were before that bus came out of nowhere and ran you over.
Do you scream and shout and berate the doctors for saving your life because now you’re going to have to walk with a limp for the next six months?
Do you complain that the doctors should have let you die because if you had died then today you wouldn’t be limping around with a cane?
Of course not. You say, “Thank you doctors for saving my life! Walking with a cane for a few months is a small price to pay for being alive instead of being dead.”
Which is exactly the response the Democrats should have made to the Republicans who were complaining that the Democrats’ Covid spending caused inflation, because the government’s COVID spending did the same thing — It saved the economy’s life.
Any Inflation Caused By Covid Spending Was MORE THAN Worth It
Over the Republicans’ objections, those programs kept the economy alive instead of letting it die.
The Republicans’ whining that the Democrats are bad guys because the Covid spending that saved the economy caused some of this awful inflation is like your uncle complaining that your doctors are bad guys because their life-saving surgery left you with a temporary limp instead of just letting you die.
The Republicans’ Plan Was Do Nothing. Let The Economy Die
But now the Republicans are saying, “We wish the government had just stood back, let the economy die and allowed the country to plunge into another Great Depression because then we wouldn’t have as much of this nasty inflation.”
- Do you say, “Hmmm, cost of insurance deductible, $500 vs. Cost of new car, $25,000. I choose to pay the cost of buying a new car so that I can avoid that awful insurance deductible”?
- Do you say, “Hmmm, walking with a limp for a few months vs. Being dead. I choose to be dead so I can avoid walking with a limp for a few months”?
- Does anyone with even half a working brain say, “Hmmm, living with 10% inflation for several months vs. Having the economy crash into a huge depression, maybe for years, and have 7% inflation. I choose to crash the economy into a massive depression so that I can avoid living with 10% inflation and instead have only 7% inflation”?
Obviously, NO.
What The Democrats Should Have Done
Instead of ignoring the Republicans’ ridiculous argument that they should be thrown out because their Covid spending caused some of the inflation, the Democrats should have come right out and called Bullshit!
They should have said:
Most of the inflation was caused by the pandemic and the Russian invasion. To the extent that some of the inflation might have been caused by the spending the Democrats fought for that kept the economy alive during the pandemic and left the United States with the world’s strongest post-Covid economy, THAT IS A COST WELL WORTH PAYING.
1) We didn’t cause COVID. It was Trump and the nutso MAGA Republicans who made the pandemic so much worse with their crazy conspiracy theories and refusals to get vaccinated or even wear masks.
2) We didn’t cause Putin to invade Ukraine and trigger a worldwide oil and grain shortage.
3) We didn’t cause the collapse of the supply chain.
4) We didn’t cause the chip shortage
5) We DID save the economy.
- Have you noticed that unemployment is under 4%?
- Have you noticed that the American economy is the strongest in the world?
- Have you noticed that the GDP grew by about 2.5% last quarter?
Hey, morons, if 10% inflation for a few quarters instead of 7% inflation for a few quarters is the price we have to pay to save the country from another Great Depression, then good for us!
Stop your bullshit complaints that you have to walk with a limp for a few months when the alternative was being dead forever.
The money that was paid back to taxpayers was a cost that saved the economy’s life. It’s far, far better to have a living economy with temporary higher inflation than a dead economy with a little lower inflation.
Extreme People Won’t Compromise
But the Democrats ran from the fight.
“Let’s all work together. Let’s play nice. Let’s be bipartisan. Let’s not criticize the other side. Let’s not upset them. Let’s be nice to them and maybe they will like us and then we can all be pals.”
Play nice. Don’t be mean. Come together. Kumbaya.
None of that nonsense works with fanatics, ruthless strivers, power-hungry sociopaths, ego maniacs, true believers and crazy people.
People like Jim Jones, Alex Jones, Jim Jordan, Donald Trump, and Marjorie Taylor Greene won’t meet you halfway any more than you can negotiate a “mutually beneficial solution” with the likes of Hitler, Saddam Hussein, Vladimir Putin or Kim Jong-un.
So, here’s what the gutless Democrats should have said:
- We prevented a massive depression. We saved the economy.
- You’re welcome, America!
— David Grace (Amazon Page — David Grace Website)
