Inflation has seen its largest increase in decades even as President Biden pushes another $4 trillion in spending at a time of historic U.S. federal debt.
The U.S. Bureau of Labor Statistics on Wednesday reported that the core Consumer Price Index increased 0.8 percent in April, meaning that it has now increased 4.2 percent over the last 12 months, which is the highest increase since 2008.
For several segments of the economy, one has to go back even further to find a comparable increase.
The index for all items excluding food and energy rose 0.9 percent in April, which was the highest monthly increase since 1982. The index for used cars and trucks rose 10 percent in April, which was the largest since statistics began being record in 1953.
These numbers come at a time when the U.S. debt level has eclipsed 100 percent of the gross domestic product for the first time since World War II. The government authorized about $4.1 trillion in spending in 2020 to fight the coronavirus and the economic effects of lockdowns.
Then Biden followed up with an additional $1.9 trillion upon taking office. And now, he’s pushing for another $4 trillion in spending. If passed, the government will have enacted $10 trillion in new spending in a little over a year.
This is completely reckless. The federal government does not have money to spend. The economy does not need more government spending, it just needs officials to step out of the way and allow businesses to completely reopen now that the vaccine is widely available.
The $1.9 trillion in spending that Biden signed into law already exceeded the output gap, or the difference between the economy’s projected performance and potential performance. To add $4 trillion when we are already seeing the signs of inflation would be absolutely reckless.