A Year of Democrats' Inflation Fiction

KEY TAKEAWAYS

• One year ago, Democrats passed a partisan “COVID-19 relief” law, injecting $2 trillion of federal stimulus into the economy as it was already recovering.
• Since then, Americans have seen inflation soar, including higher prices for household essentials like groceries and gas. In February, prices were up 7.9% from a year ago.
• Democrats have spent the last year telling Americans one fiction after another about the inflationary effects of their reckless spending agenda.

One year ago, Democrats passed their massive “COVID relief” law, injecting $2 trillion of federal stimulus into the economy, despite the recovery being well underway. Prices have been climbing ever since, and families are being squeezed by inflation not seen in four decades. In February, prices were up 7.9% from one year earlier. Over the past year, Democrats made a lot of claims about inflation that did not hold up.

first: Democrats claimed inflation wouldn’t happen

“Is there a risk of inflation? I think there’s a small risk, and I think it’s manageable … To get a sustained high inflation like we had in the 1970s, I absolutely don’t expect that.” – Treasury Secretary Janet Yellen, 3-14-21 

Republicans warned that Democrats’ $2 trillion stimulus would ignite inflation. Even liberal economists urged Democrats to reduce the size and scope of their plans. Larry Summers, economic adviser to Presidents Bill Clinton and Barack Obama, cautioned that the oversized spending package could “set off inflationary pressures of a kind we have not seen in a generation.” Democrats dismissed these warnings, eager to use the guise of “COVID relief” to enact their liberal laundry list, and every Senate Democrat voted to push this partisan law into effect.

then: democrats claimed inflation wouldn’t last

“Some folks have raised worries that this could be a sign of persistent inflation. But that’s not our view.” – President Joe Biden, 7-19-2021

As predicted, inflation began to climb. Democrats had to acknowledge the higher prices hitting Americans, but they said these would be temporary. In early June 2021, Treasury Secretary Janet Yellen said, “We have in recent months seen some inflation ... I personally believe that this represents transitory factors.” Soon after, the Labor Department reported prices had jumped 5% in May from one year earlier. Prices went up even more in June, increasing 5.4% year over year. President Biden told the country, “Our experts believe, and the data shows, that most of the price increases we’ve seen are, were expected and expected to be temporary.”

after that: democrats claimed more SPENDING would fight Inflation

“Want to fight inflation? Support Build Back Better!” – Majority Leader Chuck Schumer, 11-16-21

Despite what Democrats claimed, consumer prices kept climbing through the end of the year, hitting 6.8% in November and 7% in December. As Americans grew increasingly concerned about the damage skyrocketing inflation was doing to their budgets, Democrats changed their messaging but not their radical plans. No longer designed to “transform” the U.S. economy, their $4.9 trillion reckless tax and spending spree was now being called the “answer” to inflation.

Economists refuted these claims, pointing to the $3 trillion in gimmick-obscured deficit spending that would result from Democrats’ legislation. Even as members of their own party pushed back on these inflationary spending plans, President Biden and other Democratic leaders would not budge from their radical, partisan agenda.

now: democrats deflect blame

“My plan to fight inflation will lower your costs and lower the deficit.” – President Joe Biden, 3-1-2022

As prices kept climbing, Democrats pointed fingers in all directions except at their reckless spending agenda. They blamed rising prices on “corporate greed” and consolidation. President Biden said that “inflation has everything to do with the supply chain.” Economists on the left and right pushed back on these claims. Steven Rattner, who had been an adviser to the treasury secretary during the Obama administration, said the president’s supply chain argument was “both simplistic and misleading.” He noted that “the bulk of our supply problems are a product of an overstimulated economy, not the cause of it” and that increased spending by Americans is partly because of “vast amounts of government rescue aid,” along with less spending during the pandemic lockdowns.

Democrats keep promoting their radical agenda pushing the idea that more government spending on massive federal programs will lower costs for households. They refuse to admit the role their policies played in spurring the inflation that American households are suffering through.

It has been a year since the Biden administration assured Americans they would not experience disco-era inflation. Today, Americans are facing price increases not seen since President Reagan finally reined in the high inflation of the 1970s. Because of the Biden inflation tax, the average household is having to scrounge up an extra $276 each month for expenses, and Democrats still can’t seem to separate fact from fiction. 

Americans know the truth. Oversized government spending fueled this crisis, and reckless government spending, designed to hide costs instead of lowering them, will not solve it.