The Hill reported on May 12 that the most powerful tax Biden has ever imposed on Americans is one that was never passed by Congress, promised from the White House, or voted out by citizens at the ballot box, called the invisible tax on inflation. This hurts American workers and the middle class far more than the tax increases proposed by Biden.
Trillions of dollars of spending by Congress and money printing by the Federal Reserve have already had a huge impact on the prices of common goods, and inflation has reached its highest point in years and could reach its highest point in two generations.
The main driver of inflation is now coming from the Federal Reserve’s money printing. Since the beginning of the pandemic, the Fed has almost doubled its bond purchases, pumping nearly $4 trillion into the economy, which is about the same amount the Fed purchased during the height of the Great Recession from 2008 to 2014.
The second factor in inflation comes from massive government spending. Biden wants to spend nearly $2 trillion on the “infrastructure” bill, $1.8 trillion on new entitlements, and the already passed 2021 Communist Party viral bailout package, which would bring total spending to $6 trillion, more than twice the entire federal budget before the Great Recession of 2008.
The $3200 direct stimulus payments handed out by the Biden administration, along with generous unemployment bonuses, have sent the savings rate of Americans skyrocketing. These savings and printed money would soon be in the economy, manifesting themselves in a post-pandemic spending frenzy. Whether it was food, cars, gasoline, or housing, it would all go up.
Many Americans are unfamiliar with the double-digit inflation of the 1970s and 1980s, but Biden, who served in the Senate during this period, should be well aware of it. Biden seems destined to repeat many of the most painful mistakes of that era, mistakes that led to increased economic dysfunction, a series of severe recessions, fuel shortages, and finally a conservative Republican to clean it all up.