President Biden Says Putin is Responsible for Inflation

President Joe Biden says that inflation is being caused by Putin. Despite the fact that inflation has been heating up for some time, well before the attack on Ukraine, the President repeatedly blames others for his mistakes.

This lame remark made to Democrat lawmakers was welcome, of course, because it distracts as well from the spending excesses of those who run Congress. Who after all, passed the legislation and went along with our feeble-minded President? Congress needs their excuse as well.

Most economists believe that if you increase the quantity of money faster than real output, the value of money will fall, which means lower purchasing power of money or higher price inflation.

The chart below from the Federal Reserve Bank of St. Louis shows that M1, basically cash and cash type instruments in the monetary system, went from $1.55 Trillion in March of 2020 to $7.34 Trillion by January of 2022.  Mind you the total size of the economy is around $22 Trillion.

Since the economy in the past two years has been mired in Covid lockdown, there is simply no way that production rose nearly as fast as the almost sixfold increase in money. Note as well that nothing like this increase occurred since the chart began in 1960. Not during the Cold War, the Arab Oil embargo, or even during the sequential Gulf Wars, did we see monetary increases anywhere comparable as that under Clueless Joe Biden.

Much of this boost in money supply was the ill-fated Covid relief packages, which were, in turn,  were a reaction to the government’s ill-fated lockdown policies. One terrible policy blunder apparently deserves another!

Since we never want a crisis to go to waste, Democrats added on every bit of new spending they could from welfare to the Green Agenda.

During that period, U.S. output slowed as businesses were shuttered and supply chains emptied.

Increasing the supply of money while decreasing the supply of goods available is the very definition of inflation, as in too much money chasing too few goods.

Mr. Putin has done some very evil things, but causing U.S. inflation is not one of them.

It is partially true, that cutting off Russian oil is spiking the price of oil, which was already going up with everything else. But it was Biden himself who cut U.S. oil production by an amount greater than Russian imports.

We don’t need to look for evil men abroad to blame. We have plenty of them here in this country that deserves the blame.