82’s inflation spike was caused by government efforts to reduce unemployment. Lawmakers employed a concept known as the “Philips Curve,” a belief that raising wages would result in lower unemployment. It did destroyed the economy instead. In 1982, the economy started to recover after US President Ronald Reagan imposed tax cuts. The Cato Institute theorized theorized that his 1981 tax cuts only took effect some years later, but there is no doubt that a reduced tax burden and privatization played a key role in reinvigorating the economy.
Paul Volcker was a primary player in this recovery. As Federal Reserve Chairman, he cut back on government investment into a number of risky bets. This caused a near term recession but ultimately allowed the economy to recover and eventually thrive.
So what about Joe Biden? Is he a completely innocent victim as many claim, or have his policies directly contributed to our current predicament?
Inflation is complicated, but some contributing factors are quite clear. A few include printing money, raising minimum wage, and putting massive government funding in irresponsible places.
A whopping 80% of US dollars entered circulation between January 2020 and December 2021. More than 21 states are moving to pay a minimum wage of $15 an hour. Check out this CNBC article that hilariously misunderstands how wages and inflation work. Liberals think you can just pull money from another dimension and pump it into anything with no consequences. When you raise minimum wage, employers have to raise prices to keep up, this makes everything more expensive. Artificially raising wages creates inflation. Period.
Biden not only tried to push through a record-sized $6 Trillion budget last year, but continues to funnel money everywhere he can. Meanwhile, the liberal media assures us that it’s nothing to worry about, while everything becomes more expensive for everyday Americans.
Today, even during a supply chain crisis, Biden’s vaccination mandates have been raising prices further. More employers have been firing unvaccinated employees and putting pressure on every corner of the economy.
So what is the takeaway?
All is not lost. Our economy has recovered from worse and can recover from this. One important lesson to learn is that many of Reagan’s gains were only temporary because he cut spending to government arms rather than removing them completely. What we need is privatization rather than limitation.
Regardless, 2022 and 2024 are our opportunities to turn the tide. We can’t let them go to waste.