Inflation has been a hot topic in American households, with consumers feeling the pinch of rising prices on everyday goods and services but they are blaming the wrong guy for rising prices.
A simple look at the data reveals that while Americans are quick to blame President Joe Biden for the uptick in inflation, it was his predecessor, disgraced former President Donald Trump, who triggered the surge in prices.
According to data from the Consumer Price Index for All Urban Consumers (CPI-U), the annual inflation rate stood at 2.5 percent for the 12 months ending January 2020, marking the largest increase since October 2018. However, it was during Trump’s tenure that inflation began to escalate significantly.
In January 2021, the annual average inflation rate skyrocketed to 7.3 percent, with the urban CPI increasing by 2.8 percent on an annual basis. By January 2022, the CPI-U had surged by a staggering 7.5 percent, the highest increase since February 1982.
These sharp increases in inflation occurred under Trump’s watch, laying the groundwork for the economic challenges faced by the Biden administration much as the massive security failures and Wall Street crash that occurred during the tenure of Republican President George W. Bush, Jr. saddled Democratic President Barack Obama with almost insurmountable challenges.
However, contrary to popular belief, President Biden has made significant strides in curbing inflation since taking office.
According to the US Inflation Calculator, the inflation rate in January 2023 was 6.4 percent, down from 7.5 percent in 2022.
Consumer prices rose by 3.1 percent from January 2023 to January 2024, indicating a dramatic slowdown in the rate of price increases compared to previous years.
Despite these positive developments, Americans continue to blame Biden for rising prices, overlooking the role of his predecessor in setting the stage for the current economic climate. The recent increase in inflation, while still a concern, is a far cry from the double-digit inflation rates experienced during the Trump administration.
Consumers need to recognize the complexities of the economic landscape and acknowledge the efforts of policymakers in addressing inflationary pressures.
While Biden inherited a challenging economic environment, his administration has taken proactive steps to mitigate the impact of inflation and ensure a more stable and prosperous future for all Americans.
One of the key economic policies of the Trump administration was the implementation of tariffs on imports from countries like China.
While the intention behind these tariffs was to protect American industries and workers, they ultimately led to higher prices for imported goods. Businesses passed on these increased costs to consumers, contributing to overall inflationary pressures.
The Tax Cuts and Jobs Act, signed into law by Trump in December 2017, reduced corporate taxes and provided tax cuts for individuals.
While these tax cuts were intended to stimulate economic growth, they only increased government deficits, forcing the government to borrow more money, which led to higher interest rates and inflation over time.
The Trump administration also pursued a deregulatory agenda across various sectors, including finance, energy, and environmental regulations, that resulted in excessive risk-taking and speculative behavior, which can contribute to inflationary pressures.
In his bungled response to the COVID-19 pandemic, Trump implemented various fiscal stimulus measures, including direct payments to individuals and enhanced unemployment benefits. While these measures provided much-needed support to households and businesses during a time of economic crisis, they also increased the money supply and potentially fueled inflationary pressures.
While the Federal Reserve is an independent entity, Trump pressured the central bank to keep interest rates low, further contributing to inflationary pressures by increasing the availability of credit and stimulating demand.
Trump’s economic policies and his permissive attitude towards corporate greed, combined with external factors such as supply chain disruptions and increased demand, laid the groundwork for the surge in prices that made inflation a heavy burden for many Americans.
“The four top line expenditures in our budget – number one, Social Security; number three, Medicare; number four, defense. Guess what number two is? The interest on our debt,” said Rep. Earl L. “Buddy” Carter, a Republican congressman who voted to raise the debt ceiling three times for Trump, who signed off on $8.4 trillion in new debt.
“We cannot continue this, this is unsustainable,” said the GOP lawmaker who intentionally shifted blame while also repeatedly opposing efforts to address looming government shutdown deadlines.
As the debate over the economy continues to dominate headlines, it’s crucial to remember that assigning blame based on political allegiances alone may not accurately reflect the true causes of financial phenomena.
By examining the data and understanding the historical context, Americans can gain a clearer understanding of the factors driving inflation and hold policymakers accountable for their actions.