Joe Biden got his start in politics in the 1970s and appears determined to recreate the world as it existed back then.
Misguided federal policies have pushed energy prices to punishingly high levels. Americans are struggling with inflation. Radical Muslims are holding American citizens hostage in the Middle East. Our adversaries, including Russia, are on the march. Even bell bottoms are making a comeback.
And, now, the pièce de résistance of the 1970s is also making a comeback: stagflation.
Stagflation. It’s a term that most young people and plenty of not-so-young people have probably never heard before because it’s been nearly 50 years since the U.S. suffered this leftist policy-induced madness. A combination of stagnant economic growth and high inflation.
It’s something that liberal Keynesian economists say can’t happen. Inflation, they say, is caused by a too-hot economy and a tight labor market. A sluggish economy should push prices down.
And yet stagflation did happen then, and appears to happening again, thanks to massive spending and growth-choking taxes and regulations imposed by the Biden administration.
Last Thursday, the Bureau of Economic Analysis reported that GDP growth in the first three months of the year was an anemic 1.6%, well below the consensus forecast. The next day, the “personal consumption expenditures” price index, a key policy barometer for the Federal Reserve Board, climbed 2.8%, higher than anticipated, marking the third-straight month in which prices went up faster than expected. In other words, inflation was accelerating during the same months the economy was flatlining.
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Author: Ruth King
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