Another COVID-19 Spending Bill Would Fuel More Inflationary Fire

COMMENTARY Budget and Spending

Another COVID-19 Spending Bill Would Fuel More Inflationary Fire

May 16th, 2022 4 min read
COMMENTARY BY
Richard Stern

Senior Policy Analyst, Budget Policy, Hermann Center

Richard Stern is a senior policy analyst in the Grover M. Hermann Center for the Federal Budget at The Heritage Foundation.
As Biden fiddles, he is again asking Congress to keep the fire of inflation going. Martin Poole / Getty Images

Key Takeaways

With the annualized inflation tax now around $8,500 per American household, the last thing we need is more fuel dumped on the inflationary fires.

The wild federal spending spree of the last couple of years have largely driven the hurricane of inflation now bearing down on every American household.

Inflation wasn’t caused by a failure of the market or the actions of the American people. It was the direct result of reckless federal action.

With the annualized inflation tax now around $8,500 per American household, the last thing we need is more fuel dumped on the inflationary fires. Yet, that is exactly what President Joe Biden has asked Congress to do.

Congress is now considering a $48 billion corporate bailout disguised as COVID-19 spending that takes more of your money and gives it to Biden’s chosen few. This, of course, is on top of more than $6 trillion of taxpayer money that has been spent on COVID-19.

Of these funds alone, $40 billion (80% of the bill) would go just to backfill a single program from Biden’s inflationary stimulus that gave out cash last year to businesses of the government’s choosing. However, who will backfill the bank accounts of the Americans robbed to finance this corporate giveaway?

Point of fact: It is your money that they would be giving out.

When the government offers some spending bill of this nature, politicians always try to convince you that they are offering to take your family out for dinner.

In reality, they take control of your finances, redirect your paycheck to their bank account, and then offer to use a fraction of that to take your family out for dinner. Don’t be fooled by the sleight of hand.

Whether through a direct tax or the inflation caused by money printing and deficit spending—it’s always all your money the government is using. The government cannot create wealth. It can only repurpose the things produced by hardworking American families.

Though minor league sports teams may enjoy the $500 million of your money this bill is reported to give them, why is this Biden’s focus? Aren’t the record levels of inflation the real pressing disaster?

Why, for example, not sign into law a stimulus spending aid package for the victims of inflation? Here there is an easy answer—it would create more inflation, hurting the very people it would be intended to help. Biden’s favorite tax, spend, and deficit tactics would only exacerbate the issue.

The question illuminates the absurdity of Biden’s economic policies. The deficit spending spree Biden wants would continue to drive the inflation that is taxing every American today.

The wild federal spending spree of the last couple of years—fueled by the money printing presses of the Fed—have largely driven the hurricane of inflation now bearing down on every American household.

Further, Biden has doubled down on an oversized regulatory state that compounded the supply chain crisis and has left American store shelves emptier. As the old adage goes: More dollars chasing fewer goods—a perfect recipe for inflation.

Another way of viewing it is that you can’t buy products that don’t exist. The Biden administration has done everything it can think of to ensure there are as few goods and services available as possible.

As gas prices remain at crushing levels, his administration canceled a round of leasing sales to oil producers. With record high levels of job openings, the left has continued pushing to pay people even more to stay home: Our economy needs workers, not bailouts.

Federal regulatory interference has even helped to keep baby formula plants closed—helping to create the current shortage sweeping the nation.

In many ways, asking for another $48 billion inflationary spending bill would be par for the course from this administration. This is just the latest example of Biden being unwilling to deal with the government actions that have created the inflationary mess.

As Biden fiddles, he is again asking Congress to keep the fire of inflation going.

However, instead of passing a series of spending bills to score political points, Congress has an opportunity to remove government as a barrier to prosperity. The actions that have driven inflation are plain to see.

Instead of paying people to exit the labor force, printing trillions of new inflationary dollars, or imposing crushing regulations motived by woke idealism, the solution is to believe in the American people.

Congress could use this opportunity to cut inflationary deficits, to pare down the regulatory state and allow the American people to work together to solve the inflationary crisis.

Inflation wasn’t caused by a failure of the market or the actions of the American people. It was the direct result of reckless federal action. Biden’s actions to degrade our paychecks and savings and to make it harder to produce things in America have led to this crisis.

Congress can make a down payment on the reforms necessary by simply blocking this outrageous inflationary bill. Congress should leave $48 billion in the wallets of hardworking Americans and deny Biden more fuel for the inflationary fire.

This piece originally appeared in The Daily Signal