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How A Republican Congress Can Begin to Turn Inflation Around

AMAC Exclusive – By Andrew Abbott

inflation
President Joe Biden greets California Gov. Gavin Newsom (D) as he arrives at Mather Airport on Air Force One.

Last week, California’s Democratic Governor Gavin Newsom announced that the state would distribute billions of dollars in “inflation relief” in the form of direct payments to residents by early next year, a plan that was quickly slammed by economists as likely only to worsen inflation. At the same time, Democrats in Washington – most notably President Joe Biden – have continued to push for even more massive government spending as a solution to the inflation crisis. With Republicans poised to retake control of Congress largely thanks to Democrat failures on the economy, it’s clear that inflation should be a top priority. So just what can a potential GOP majority do to alleviate inflationary pressures?

California’s scheme to solve the problem of too much money in circulation by putting even more money in circulation perfectly captures the problem Democrats now find themselves in, and outlines the challenge Republicans will have to solve if they indeed do take power next year. Having asserted for years that more government and more spending is the solution to every problem Americans face, Democrats now have no answers to the predictable negative consequences of massive government expansion and out-of-control spending – namely, the crushing inflation now wreaking havoc on the U.S. economy.

According to Newsom’s office, California’s plan will result in 17.5 million Californians receiving “between $200 and $1,050 by early next year.” Within hours of the announcement, multiple economists criticized the measure as a short-term solution that would have no discernable positive effects and only increase inflation in the medium-long term. As California State University economics professor Hannah Gabriel put it, “If the rebate is spent on gasoline, or other consumable goods that are experiencing high inflation driven by supply costs, then the rebates will likely increase the prices of those goods from increased demand—leading to more inflation.”

The inability of Gavin Newsom and California Democrats to grasp that these are exactly the kind of policies that led to runaway inflation in the first place mirrors the response of Congressional Democrats and President Joe Biden, who have sought to blame everyone but themselves for the crisis. Biden has asserted variously that the primary causes of inflation are “corporate greed,” Putin’s invasion of Ukraine, and the COVID-19 pandemic.

While all of these factors indeed likely have played some role in exacerbating rising inflation, any introductory-level economics student can figure out that the biggest cause of the inflation Americans now face is the unprecedented amount of money printed over the past two years. While some of this money was passed on a bipartisan basis and signed into law by President Trump to stave off the worst of the economic crisis at the height of the pandemic, Democrats rammed through $1.9 trillion of COVID “relief” money and a $1.2 trillion “infrastructure” bill almost entirely on party-line votes when signs were already emerging that inflation would soon become a major concern if they did so.

Democrats’ continued failure to do anything about inflation has many pundits predicting a “red wave” that will see the GOP retaking both the House of Representatives and the Senate. According to a June 26 poll from the Republican State Leadership Committee, 56% of voters cited “High cost of living/inflation, Economy in General, or Unemployment/jobs” as their top issues ahead of the 2022 midterms.

For Republicans, winning back control is only half the battle. Actually solving the inflation crisis will require implementing policies that Democrats have railed against for decades and, perhaps even more challengingly, convincing Joe Biden to go along with them.

Put simply, Republicans must embrace supply-side economics, or the belief that increasing the supply of goods on the market will bring down their price and expand the economy. This is done by decreasing taxes and removing business regulations, thereby incentivizing growth.

Biden, along with other Democrats, have been implementing the opposite approach. Their Keynesian (a.k.a. demand-side) economic approach has been to increase demand via heavy government spending and subsidies. This caused demand for goods to skyrocket. However, with the country still emerging from the pandemic, supply was utterly unprepared to meet demand. This led to “too many dollars chasing too few goods” and inflation skyrocketing. These principles of economics are the most basic and fundamental, yet almost no prominent economist employed by the federal government predicted the inflation spike.

While the most effective way to reduce inflation is for the Fed to increase interest rates, there are still several supply-side solutions for a potential Republican-led Congress to champion. While the GOP can’t on its own end the war in Ukraine or solve supply chain issues, they can focus their efforts on alleviating pressure on other areas of the economy, namely by cutting government spending and restricting the amount of money in circulation.

A solid first step toward this goal would be eliminating any remaining COVID-era government spending programs. This would curb the excess monetary supply by decreasing federal spending obligations. It would also incentivize unemployed Americans to rejoin the workforce, thus alleviating America’s critical labor shortage. Additionally, they can pledge not to advance any more of Biden’s spending programs, which would only worsen the inflation crisis. Even liberal economists concede that inflation rates would be far worse if the President’s signature $3.5 trillion “Build Back Better” bill were passed – something Democrats still haven’t given up on.

To encourage growth, Republicans can also reduce tax rates on industries facing critical supply shortages, eliminate onerous and unnecessary business regulations, and promote domestic oil and gas drilling. Though none of these solutions would eliminate inflation all on its own, together they would send a clear signal to the American people that they’re doing everything in their power to end the crisis, setting the stage for a much-needed change of course.

Andrew Abbott is the pen name of a writer and public affairs consultant with over a decade of experience in DC at the intersection of politics and culture. 


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Mandy
4 months ago

Biden will be gone if Conservatives win in 2022.

Rich
4 months ago

All we really need in congress is common sense, which we have very little of. We certainly need to first protect freedom and America’s values but stop the hate and start doing what is best FOR THIS COUNTRY. IF politicians can ever work together, this country will become great again. Until we stop deliberately destroying a persons integrity just because we disagree with them or their party, whether they are good or not, we will continue to live in the sewer. Whatever happened to open debate and respect rather than hate filled words? We see socialism/Marxism on full display and shouldn’t like what we see.

Marie Langley
4 months ago

These Democrats are such idiots. It’s Economics101. They obviously did not take any Economics classes in college if they even went to college. Such an outrage that they are so stupid and are destroying this country because of it. Makes me so angry.

RED=REMOVE EVERY DEMOCRAT

Clark Kent
4 months ago

Don’t ASSume the Dumbocrats won’t hold both House and Senate in November. NOTHING has been done to ensure free, fair and honest elections nationwide. The fall fraud fest is heading soon to your community.

Robert Zuccaro
4 months ago

Simple solution: ask yourself “What would a Democrat do?”… AND DO THE OPPOSITE! Problems solved!

Sean Richman
4 months ago

The inflation in AMERICA will not turn around until we get rid of these greedy liberal democRATS and bring back a non politician like President Trump and even then it will take a very long time to recover from biden,nonobamba,soros,peelosi and the rest of the scum that is intent on destroying AMERICA.

tika
4 months ago

cut the Washington bureaucracy by 70%

johnh
4 months ago

Why do so many US Corporations pay $500 or less in Federal taxes each year? And would like to see analysis of Trump’s tax cuts for corporations & what positive outcome of this & is this contributing to inflation today or not ?? Does this tax cut continue until year 2025???

Steve W
4 months ago
Reply to  johnh

Probably because corporations do not have profits, per se. SHAREHOLDERS have profits or losses on the investment stake in said corporation-which the government gleefully taxes at the highest possible rate. Your retirement fund most likely is spread out over a number of corporations and other investment vehicles, so advocating to “tax the greedy corporations” is advocating to put even more crippling taxes on your retirement funds.

Clark Kent
4 months ago
Reply to  johnh

Take an Economics 101 class and get back to us…

Wayne
4 months ago
Reply to  johnh

Corporations don’t pay ANY taxes. Only people pay taxes. Any taxes assessed on a corporation are paid by the customers or employees of the corporation.

johnh
4 months ago

I hope that Republicans can tame inflation in future. What is impact of increasing Fed Deficit thru terms of Obama & Trump for 12-years …as this was both parties. Also, what is impact of Trump’s tax cuts of $1 Trillion per year. And the Fed should have started raising interest rates a few years ago: Lastly , the Fed is independent , but I remember Trump harassing the Fed about interest rates & wanted it at zero & now Biden has negative comments about Fed raising rates. Does either party understand what causes inflation today & do they understand how the Fed stopped this runaway inflation back in early 80’s.

Becky
4 months ago
Reply to  johnh

The Fed is NOT independent, indicating free thought. It is a cabal of elite, Globalist bankers taking down the US….. the last Bastian of freedom remaining in the world. That freedom is extremely shaky these days.

johnh
4 months ago
Reply to  Becky

Understand the Fed was formed in 1913. And from what I have read is that, the Fed was the biggest factor in taming inflation in early 1980s & that is when interest rates were up to 16-21%. Are you saying Globalist bankers created this whole fiasco ????

Lynne Cowan
4 months ago

These 2 are wooden head dummies.

Texas Resister 64
4 months ago

We’ve got a big problem, too, with too few people chasing the huge number of jobs. Solution: close down government departments, like Education, and put those people out of work.

chuck
4 months ago

The ignorance of some American citizens the on how the economics in our economy works is puzzling.. One needs only to recall the transition that occurred during the Reagan years after President Carter’s administration. Those 4 years of Jimmie Carter were painful. It took at least 3 years before we could start to see daylight. All of the good work accomplished was forgotten and of course there was the first war in Iraq that drained us financially. That statred our decline which continued through 3 more administrations. We cannot duplicate that mistake again. We lost valued treasure, in human life lost as well as plenty of funding that could have been spent on our infrastucture. Also, We as a nation must make a concerted effort to have better Economics, and History, and Cursive Hand Writing restored taught in our schools so we do not have so many people that seem to be dullards on the basics of educated talent.

Robert Zuccaro
4 months ago
Reply to  chuck

We were dependent on OPEC in the 80s. OPEC cut production due to our support of Israel which led to station lines and higher trickle down cost of living… We did not, as we do now, have the ability to be 100% independent on foreign oil like WE WERE before Brandon got “busy” waging his war on oil.

Rich
4 months ago
Reply to  Robert Zuccaro

Chuck, as far as education is concerned, we need to get rid of all the “woke” educators. Until we pull back from the socialist/Marxist mentality America will continue to decline.

TheHoneyBadger
4 months ago

Socialism is Equality in Poverty

Will
4 months ago
Reply to  TheHoneyBadger

Except for an eleat class who enjoy all the privileges

Centurion
4 months ago
Reply to  TheHoneyBadger

Which destroys the middle class. This is something the elites have wanted to do for over 100 years. They want a two class society. Simply put the have’s and the have not’s.

johnh
4 months ago
Reply to  Centurion

Middle Class is what made America great & never let this get away from us. It is a bit worrisome when you look back & see how much CEOs of Corporations have increased salaries vs. the employees & that is not a good sign (but a sign of greed). Some people do not agree, but in my opinion, Trump’s tax cuts benefited the top richest people a lot more than the middle / bottom class.

Rich
4 months ago
Reply to  johnh

Taxes are always too high, however, I don’t really care how much the top executives are making as long as I can have a decent standard of living and afford my daily needs, which we do NOT see now. If you think spreading around the wealth is the answer, socialism must be your cup of tea. And if you think Biden’s run away spending will not produce more taxes, you must be living on another planet.

Bill T
4 months ago

We also must fully understand that the RHINOS are traders and must be eliminated. There no better than these Marxist haters and must be destroyed.

Garye
4 months ago
Reply to  Bill T

Yes, the marxist democrat party, joebama, along with the pretenders ( rino’s) are ALL a problem for Our Country.
President Trump had it correct, the “swamp” must be drained! These self serving ,anti American, lobbyists no longer represent We the people and the interests of Real Citizens.
They think they’re in charge but their only purpose is to SERVE Citizens.

Bill T
4 months ago

This installed president has been indoctrinated into a culture of government is GOD! He’s the puppet master for the new world order, or new liberal order , there intertwined with each other. This president is doing everything in his authority to completely transform our country into a tyranny. Exactly what our founders were protecting our country from with our great and one and only constitution . This is a serious problem, he actually believes he’ll be the first president to completely transform this republic into something that it was never intended to be. With the progressive socialist democrats firmly behind him and trillions of dollars also ( most of it black money completely corrupt) and the woke corporations and big businesses all in on this, if there not trust me there GONE! It’s a dire situation right now. This is right out of the Marxist playbook and there playing it better than ever. We as true American citizens I’m sure fully understand what this means for our country and our families future. This is a straight up attack on our citizens by a completely and brazen administration, they actually couldn’t care less about anything or anyone. It’s all about CHANGE, at any and all costs. I wish I had a solution and like yesterday. There definitely going to rig this mid term election again. It’s up to all of us to turn back and destroy these Marxist haters of our country and all it’s great citizens.

Rich
4 months ago
Reply to  Bill T

Totally agree. We can see how anyone that tries to promote the truth or even question an issue is destroyed. BUT, I believe their “woke” mind control is backfiring.

John
4 months ago

If this election were not stolen: The Bidens, Clinton’s, and more. Would be in prison right now with the Epstein list

John
4 months ago

This Administration is doing it’s best to destroy America in multiple ways.

John
4 months ago

On another issue: People or Animals do not heat or cool the Earth. Government/ Global scam for control of all the Earth. Socialism of the Earth is their goal. Lord help us!

Rich
4 months ago
Reply to  John

Global warming is primarily coming from all the hot air in Washington D.C..

Steve Pappas
4 months ago

290 in the House and 67 in the Senate.. Those are the 2/3rds numbers needed to override a presidential veto. Those kind of numbers would also prevent the Dems from filibusters and other congressional road blocks. With these majorities, conservatives could also employ the Congressional Review Act to blunt federal agencies like the EPA, OSHA, Department of Interior or HHS from enacting any more regulatory requirements on the nation. We might get close in the House, 60 in the Senate will need some heavy lifting but would prevent filibuster. 67 wishful thinking or realistic?

Leesson
4 months ago
Reply to  Steve Pappas

Be still my heart. If only….
Unfortunately, while I think the 2/3 number is achievable in the House, I don’t think it is in the Senate. There aren’t enough Red states to be able to get to the 67 super majority. And even some of the Red states have unpredictable GOP (RINO: Murkowski, Collins) Senators. The passage of the 27th Amendment was not a good thing, in my opinion. The Founding Fathers were smarter than we think on this issue.

Leesson
4 months ago
Reply to  Leesson

Should read “17th Amendment”…

Jeb
4 months ago

The question now becomes, will the Republicans do what needs to be done??

PaulE
4 months ago
Reply to  Jeb

The $23 trillion dollar question.

Becky
4 months ago
Reply to  Jeb

Not enough MAGA pols yet. So no.

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