It is now being reported that inflation under Biden / Pelosi-Schumer is the worst in 40 years (see: Suffer like it's 1982 — Bidenflation the worst in 40 years). Wrecklessly, Biden and the Pelosi-Schumer controlled-Congress are pushing to spend even more on grandiose projects that would take a long time to come to fruition yet would inject more dollars into circulation straightaway. That would result in even worse inflation than now, and the worst kind, Congressional spending induced inflation.
Most do not understand that under a fiduciary monetary system of irredeemable bank notes, there is no money. In other words, it is all bank credit. Every dollar in circulation is merely evidence of a withdrawn bank deposit, and all bank deposits are credits.
Money, were it to exist, would be coined metal by weight and fineness. Money exists irrespective of government and bankers. Cash requires bankers and legal tender requires enforcement agents of government. Today and for a long time now, Federal Reserve Notes are centralized bank notes.
When credit growth (inflation) outstrips production, and hence goods and services for sale, whether that credit is in the form of bank loans or in the form of dollars in circulation, the result is rising prices. As wage rates too are prices, if wage rates fail to rise concurrently, the working-class become hurt by inflation.
The recent run up of inflation is the kind that people do not like. It is causing rising prices for goods and services without a corresponding rise in wage rates, which are prices, and profits.
The Congress of Pelosi-Schumer has caused this spate of wicked inflation. All of the irresponsible Covid-19 related spending, for a questionable pandemic that caused no excess deaths in the USA (see: The Covid-19 Big Lie Scam of 2020. The CDC Says Covid-19 Has Not Killed Anyone. Official CDC Data and the True Dollar Journal Exposes the Covid-19 Hoax), simply was not needed.
So how did this bad kind of inflation happen?
- Lockdowns caused product and services shortages.
- Pelosi-Schumer gave US residents funds, approved by both Trump and Biden, to bid up prices on fewer available goods and services owing to lockdowns.
Federal Net Outlays, i.e., spending by Congress, beyond the 17% to 18% threshold, disrupts the economy. Such excessive spending reveals the unwise nature of Congress.
Congress' Debt to GDP
It remains to be seen how the world will tolerate the current levels of debt-to-GDP. Historically, when that ratio is falling, the economy does better. Congress simply lacks the omniscience needed to know how to spend and upon what to spend.
Current Debt-to-GDP is more than double what it was during the Greenspan Great Inflation / Dot Com / Clinton Second-Term Prosperity. It is three times what it was during the tail end of the Post-Wars (WW2, Korea) Great Middle Class Prosperity, the last era of authentic economic growth not juiced by neither Federal Reserve Bankers nor any sitting Congress.
For the Presidents' True GDP scorecards referenced above, see: True GDP Under the Presidents.
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