Joe Biden claimed there would be no “long-term inflation,” an impossibility given the amount of money that’s been printed since early 2020.
In short, an increase in the money supply always leads to an increase in inflation, and all the Covid unemployment checks and other cash benefits weren’t funded fully by tax revenues.
During a CNN Town Hall, Biden said “there will be near-term inflation,” but incorrectly claimed “it’s highly unlikely that it’s going to be long-term inflation that’s going to get out of hand.”
Biden: Our multi trillion dollar spending bills “will reduce inflation, reduce inflation, reduce inflation” pic.twitter.com/NcKVVaBxxZ
— Tom Elliott (@tomselliott) July 22, 2021
That’s an impossibility because, as economist Milton Friedman once pointed out, inflation is the result of a decline in the dollar’s value due to an overall increase in the amount of money held by the public.
In other words, the more common something is, the less valuable it is.
Unfortunately, like Biden, some Federal Reserve officials are also falsely claiming that current inflation is merely “transitory,” a bold claim that was recently challenged by the Wall Street Journal.
“Reporting about U.S. inflation rarely contains the words ‘money supply,’” the WSJ pointed out. “We are repeatedly told that the most recent upticks in inflation are anomalous and “transitory.”
“Wrong. The inflation upticks aren’t temporary and were predictable, driven by an extraordinary explosion in the money supply. Since March 2020, the M2 has been growing at an average annualized rate of 23.9%—the fastest since World War II.”
The Federal Reserve is basically hiding severe inflation behind temporary price hikes in goods and services due to ongoing supply-chain disruptions – and also due to the unemployed unwilling to go back to work because they’re getting checks from the government.
But those government checks aren’t free money; the public will pay it back with the “hidden tax” called inflation.