YELLEN DISTORTS INFLATION STORY

June 2, 2022

In an interview yesterday, Treasury Secretary Janet  Yellen responding to a question about what the President is doing about inflation  stated: “a spending package could very well have reductions in the costs of prescription drugs that could make a difference to every family that has drug costs as part of their household budget. That could make a difference (i.e. in inflation) very quickly.” she said.   

What a load of nonsense and deception from a trained economist!!  A “spending package” is just what caused this inflationary economic mess. 

The “spending package bill” is the deceptive fiction President Biden has been peddling all along.  No one expects Biden to make sense any more…so he gets a pass when he says something stupid or simply wrong.  The President has been pleading since January to “Pass my “Build Back Better Bill” because we have included cash “give aways” in that  bill that will ease the pain for those suffering from rampant inflation.” (This BBB bill is a massive $4 trillion dollar new spending bill which would be spent on top of and added to the deficit of the old $1.9 trillion dollar spending bill passed in January.)  Thankfully, Congress was smart enough to kill the BBB-a disastrous bill. 

But give Biden a pass—but we can not excuse Secretary Yellen, who is, after all a Yale university diplomate and former chairperson of the “the Fed” who must  know well that Biden’s  story is just that —a deception.  In fact, as Biden’s Secretary of the Treasury must have been well aware that the “massive spending” he engaged in as a result of the January 2021 “post pandemic spending package” was the very means which generated our present inflation spike  way back in February and March. But the President and the Secretary of the Treasury did nothing at that time. 

But rather than simply doing no harm, it was Yellen who around that time that actually untruthfully or erroneously claimed that surging inflation which worried us all was, according to Yellen and the President “just a temporary glitch”—the result of supply chain issues”.  That deception, was stated while most economists and certainly the former FED chairwoman well aware of the many voices that had been raised about the likely inflationary impact of Biden’s  almost $2 trillion dollar post pandemic federal massive spending bill.  

Let’s count the ways President Biden flooded the nation with money and caused the inflationary spiral we are all experiencing today:  President Biden (using deficit spending ) sent  $750 billion dollars to the states;  $600 billion dollars to families for direct aid; $400 billion dollars to financially vulnerable households; and  $150 billion dollars to businesses. That is almost two trillion dollars of deficit “paper money” Biden printed up out of thin air…that will have to be paid back by future tax payers.

That kind of unprecedented  “drunken sailor-on-shore-leave spending” without question leads to inflation.  Particularly, when at that time many industries were closed due to Covid and millions of workers were confined of chose to stay home—as a result GDP and industrial output declined.  The result was a severe shortage of goods to buy but a massive surplus of Biden-supplied money.  The price of goods skyrocket under such circumstances or conversely the value of money declines—i,e, inflation occurs. 

 The President hoped his excesses as a drunken sailor benefactor and his munificence would  be lauded and increase his poll numbers—but his ignorance of economics—backfired and led not to a Nobel Prize in economics but to a disastrous economic result——spiraling inflation and fear of a disastrous recession to follow.   

Every Econ 101 student learns that too many dollars pursuing too few goods-is a prescription for inflation.  (Biden studied history in university then went on to graduate from the bottom of his law school class. There is no record of any economics courses. Too bad for us..) 

Biden created the major part of this mess by pumping too many dollars ($2 trillion dollars worth) into the economy at just the wrong time.  His urging Congress to pass Biden’s Build Back Better (lol) bill or any aspect of it would be a sign of some form of mental illness, or best described as pouring gasoline onto an already blazing bonfire. 

Thus for Yellen to claim that a “spending package” would ease the pain on families is just so much hooey.  Any further spending would only add to the dollars in circulation and intensify inflation.  More money in circulation only cheapens the dollars in the pockets and hands of every worker. Furthermore, any family receiving these cash give aways, may save a few dollars on their prescription costs, but they must still face the larger expenditures  and surging prices for comestibles and staples in the food market, and then at the filling station “‘gulp’ (at the rising gas price) and then pump the gas’ ” when they fill the family auto gas tank. (Gasoline prices are rising rapidly and in fact just yesterday rose 5 cents per gallon over-night to $4.63/per gallon. The price will certainly be in the over $6 dollar a gallon range by July. ) 

Any “spending package” that Biden proposes for inflation is just window dressing which will mean absolutely nothing to the suffering working classes who live paycheck to paycheck and find each day,  their paycheck buys less and less of what they need.  

As I have noted elsewhere, Biden has painted himself into the a tight little crowded corner, where he and his supporters— a minority of far-left economic radicals— have trapped themselves.  He has no intention or ability to step out of that little dry spot and over the wet paint.  Biden owes his seat in the Oval Office to the radical left.  He has worked much of the first half of his term—not for the nation as a whole—but for the far left wing agenda—-polices favored only by a tiny minority of political. fringe Americans. He has ignored the needs of the American majority (breaking a promise to govern from the center, he duplicitously made as a candidate).  And now he has no options or practical plans to undo the economic mess he and his radical colleagues have created.  

His only motivations now are useless efforts at futile deception —and encouraging those around him such as Secretary Yellen—to deceive as well.