Joe Biden: My Plan for Fighting Inflation - WSJ
S E E D E D C O N T E N T
The global economy faces serious challenges. Inflation is elevated, exacerbated by Vladimir Putin's war in Ukraine. Energy markets are in turmoil. Supply chains that haven't fully healed are causing shortages and price hikes.
Americans are anxious. I know that feeling. I grew up in a family where it mattered when the price of gas or groceries rose. We felt it around the kitchen table. But the American people should have confidence that our economy faces these challenges from a position of strength.
In January 2021, when I took office, the recovery had stalled and Covid was out of control. In less than a year and a half, my administration’s economic and vaccination plans helped achieve the most robust recovery in modern history. The job market is the strongest since the post-World War II era, with 8.3 million new jobs , the fastest decline in unemployment on record, and millions of Americans getting jobs with better pay.
Since I took office, families have increased their savings and have less debt: A recent Federal Reserve report found that a higher percentage of Americans reported feeling financially comfortable at the end of 2021 than at any time since the survey began in 2013. Business investment is up 20% and manufacturing jobs are growing at their fastest rate in 30 years. There were more new small business applications in 2021 than in any previous year.
The U.S. is in a better economic position than almost any other country. According to the International Monetary Fund, the U.S. economy will be larger at the end of this year—relative to its prepandemic size—than any other Group of 7 economy. The U.S. economy may grow faster this year than China’s economy for the first time since 1976.
With the right policies, the U.S. can transition from recovery to stable, steady growth and bring down inflation without giving up all these historic gains. During this transition, growth will look different. We will likely see fewer record job-creation numbers, but this won’t be cause for concern. Rather, if average monthly job creation shifts in the next year from current levels of 500,000 to something closer to 150,000, it will be a sign that we are successfully moving into the next phase of recovery—as this kind of job growth is consistent with a low unemployment rate and a healthy economy. Things should also look different from the decades before the pandemic, when too often we had low growth, low wage gains, and an economy that worked best for the wealthiest Americans.
I ran for president because I was tired of the so-called trickle-down economy. We now have a chance to build on a historic recovery with an economy that works for working families. The most important thing we can do now to transition from rapid recovery to stable, steady growth is to bring inflation down. That is why I have made tackling inflation my top economic priority. My plan has three parts:
First, the Federal Reserve has a primary responsibility to control inflation. My predecessor demeaned the Fed, and past presidents have sought to influence its decisions inappropriately during periods of elevated inflation. I won’t do this. I have appointed highly qualified people from both parties to lead that institution. I agree with their assessment that fighting inflation is our top economic challenge right now.
Second, we need to take every practical step to make things more affordable for families during this moment of economic uncertainty—and to boost the productive capacity of our economy over time. The price at the pump is elevated in large part because Russian oil, gas and refining capacity are off the market. We can’t let up on our global effort to punish Mr. Putin for what he’s done, and we must mitigate these effects for American consumers. That is why I led the largest release from global oil reserves in history. Congress could help right away by passing clean energy tax credits and investments that I have proposed. A dozen CEOs of America’s largest utility companies told me earlier this year that my plan would reduce the average family’s annual utility bills by $500 and accelerate our transition from energy produced by autocrats.
We can also reduce the cost of everyday goods by fixing broken supply chains, improving infrastructure, and cracking down on the exorbitant fees that foreign ocean freight companies charge to move products. My Housing Supply Action Plan will make housing more affordable by building more than a million more units, closing the housing shortfall in the next five years. We can reduce the price of prescription drugs by giving Medicare the power to negotiate with pharmaceutical companies and capping the cost of insulin. And we can lower the cost of child and elder care to help parents get back to work. I’ve done what I can on my own to help working families during this challenging time—and will keep acting to lower costs where I can—but now Congress needs to act too.
Third, we need to keep reducing the federal deficit, which will help ease price pressures. Last week the nonpartisan Congressional Budget Office projected that the deficit will fall by $1.7 trillion this year—the largest reduction in history. That will leave the deficit as a share of the economy lower than prepandemic levels and lower than CBO projected for this year before the American Rescue Plan passed. This deficit progress wasn’t preordained. In addition to winding down emergency programs responsibly, about half the reduction is driven by an increase in revenue—as my economic policies powered a rapid recovery.
My plan would reduce the deficit even more by making common-sense reforms to the tax code. The Internal Revenue Service should have the resources to collect taxes that Americans already owe. We should level the international taxation playing field so companies no longer have an incentive to shift jobs and profits overseas. And we should end the outrageous unfairness in the tax code that allows a billionaire to pay lower rates than a teacher or firefighter.
I welcome debate on my plan to tackle inflation and move the economy to stable and steady growth. I have a very different approach from Congressional Republicans, led by Sen. Rick Scott, whose plan would raise taxes on people making less than $100,000 and require that Congress reauthorize bedrock programs like Medicare, Social Security and Medicaid every five years. That would make American families poorer and more economically insecure.
The economic policy choices we make today will determine whether a sustained recovery that benefits all Americans is possible. I will work with anyone—Democrat, Republican, or independent—willing to have an open and honest discussion that delivers real solutions for the American people.
Mr. Biden is the 46th president of the United States.
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Sad to say Joe Biden is the cause of all of this. Btw, I doubt he is capable of writing the op-ed that is under his name.
He is right about fixing the supply chain issue. Part of that would be restoring American energy.
He is absolutely wrong on his natural impulse for taxes, regulation and more spending.
Btw, I doubt he is capable of writing the op-ed that is under his name.
along those lines, nbc is reporting today that Biden is upset that every time he makes a statement in public, aides immediately “clarify” that he meant the exact opposite of what he said.
he thinks it makes it look like he’s not in charge.
you think?
As a matter of fact, wasn't it just recently that he told us that the U.S. economy was doing great, and we just haven't noticed it?
That seems to be democratic messaging in nutshell. Voters are too stupid to understand that it’s a good thing they are having trouble paying their bills.
They absolutely depend on those people when they do their gaslighting.
They are already spinning the Hunter Laptop story:
I disagree, Biden is not the cause of all of it. He does however get all the blame as he's the one sitting in the head chair in the Oval Office, just like he gets the credit for the things that have gone well. Like he gets to claim credit for shrinking the deficit when it was more a case that the Covid spending shut down and more people are back to work (as businesses have opened back up) so tax revenue has gone up, both actions allow for a reduced deficit.
His EO's at the start of his administration definitely impacted this issue and helped to make inflation worse but he didn't just cause it all by himself. And I do believe that restoring American energy would go a long way to both curb inflation and help put an end to that war in Ukraine or at least help Europe get off of Russian oil / gas. And I agree the impulse to tax, regulate and find more money to spend will not help lower inflation at all.
And what of the $Trillion spending bills?
That's ALL on Biden and his administration. The result of that has been and will continue to be higher taxes.
His EO's eliminated any blame being placed on previous administrations. Although I can't say it's "100% on Biden", I don't think he's smart enough to put all that together himself. But at the end of the day it's his signature at the bottom of each one.
Am I the only one who noticed they never talk about getting their spending under control? It's always about how they are going to reform how they are going to collect taxes.
"...a higher percentage of Americans reported feeling financially comfortable at the end of 2021..."
That's some stale-ass bread.
How about this one:
In response to reporters’ question about taking any "responsibility" for inflation, Biden stated, "I think our policies help, not hurt."
or
"I want us to be crystal clear about the problem," Biden stated. "There are two leading causes of inflation we’re seeing today. The first cause of inflation is a once-in-a-century pandemic. Not only did it shut down our global economy, it threw the supply chains and the demand completely out of whack."
He then explained the other cause. "And this year we have a second cause, Mr. Putin’s war in Ukraine." He added, "We saw in March that 60% of inflation that month was due to price increases at the pump for gasoline."
...caused by the sanctions we imposed and the European Union is following our logic to make it even worse.
Buzz, you're kidding, right?
The EU has tiptoed around the only sanctions that would be significant to Russia - that would be sanctions on Russian energy. Only hours ago the EU agreed to some partial sanctions on Russian oil.:
What makes you think I'm kidding? Don't you drive a gas-powered car? Do you think the sanctions only affect the availability of oil? Are you paying no attention to the farmers who need fertilizer? And is there not a crisis over wheat and grains? If the sanctions have not caused those problems, then the retaliation for those sanctions are doing it.
By the way, 80% is PARTIAL?
Yes, as do people where you live.
Do you think the sanctions only affect the availability of oil?
Oil & gas are the important exports Europe gets from Russia. None of the current sanctions have much effect on the US economy.
Are you paying no attention to the farmers who need fertilizer?
I am. Joe should have.
And is there not a crisis over wheat and grains?
Where does the US get wheat and grains? Shall we tell America's farmers that we somehow depend on Russia and the Ukraine?
If the sanctions have not caused those problems, then the retaliation for those sanctions are doing it.
What do you think of this theory?
America's problems were caused by an ideological scheme to shut down the fossil fuel industry, $Trillion spending bills and unnecessary shutdowns of the economy.
I don't have any knowledge of that theory to venture an opinion. and in any event, good morning, Vic, and now it's good night for me.
It's been a pleasure Buzz,
Have a good night.
And what about the tariffs that cost the consumers more for everyday items? When people are struggling to pay for food, rent and utilities is not the time to dream about creating American industries to compete with foreign ones, especially since it's a "down the road" situation, and the wages that will have to be paid are bound to be much higher and will still increase the cost of products. If Biden wasn't shaking in his boots about being called soft on China before the midterms totally repealing the tariffs would reduce consumer costs.
Well, anyway, not everyone is having trouble, the arms manufacturers are celebrating these days - armaments for Ukraine, nuclear subs for Aukus - it's a bonanza.
You mean the unfair trade deals the US engaged in that destroyed good paying union jobs? We need to return to what was briefly being done. Put high tariffs on any imported goods made with cheap/slave labor.
I thought the job situation in America was much improved, now you're saying it's not? You can't deny that the American consumers are feeling the pain of unnecessary higher prices.
Here's the latest on that:
The U.S. economy gained 428,000 jobs in April 2022.1 The job gains reflect a recovery from the significant uptick in unemployment that happened at the height of the COVID-19 pandemic.
April's gains help make up for some of the record 20.5 million jobs lost as businesses shut down to slow the spread of the COVID-19 two years ago.2
As of April 2022, there were 5.9 million unemployed people in the United States, 224,000 more unemployed people than in February 2020, the month before the pandemic became widespread in the U.S.1 The big swings in job losses and job gains in 2020 and 2021 reveal the tremendous impact of the pandemic on the U.S. economy.
The question is what kind of jobs? What happened to America's manufacturing sector?
You can't deny that the American consumers are feeling the pain of unnecessary higher prices.
Six percent inflation and the highest gasoline prices in history is a far cry from spending what we should be spending for a jar of Peanut butter.
Are not more and more factories mechanizing with robotic technology? What a man could do in a specific time is being replaced by robots that can do it faster, probably with less errors, and on a 24/7 basis. Is that the fault of "unfair" competition?
I've seen stories on TV of restaurants that are having trouble hiring staff, turning to using robots - and I even posted an article about that. Is that happening in the USA?
We should replace the people working in the technology field with AI.
We should replace lawyers with advocates along the lines of the French legal system.
We should replace anesthesiologists with a machine......
Let's do it!
You were talking about MANUFACTURING jobs, so what kind of bullshit is that?
I just put the shoe on the other foot.
I don't think it fit, but you can wear it if you want.
So, what's the plan? Biden says he has one. But Biden didn't tell us anything about any plan. Biden has only given us excuses and political pandering points.
Apparently the keystone for Biden's plan is to rely on the Federal Reserve. But Biden's excuses don't have anything to do with the money supply which is what the Fed regulates. Don't be fooled by Biden's claims that household savings have increased: that's a result of inflation in housing prices. Inflation increases the value of durable goods through price increases which is accounted for as increased savings. And Fed monetary policy is influencing prices of durable goods. What is happening in the US economy doesn't have anything to do with monetary policy. There aren't too few dollars in the economy and the value of the dollar has not depreciated in the foreign markets upon which the United States depends.
Balancing the Federal budget won't address the public cost of servicing existing Federal debt. Federal treasuries aren't cheap any longer. Servicing the existing Federal debt is now subject to a 2 to 3 pct inflation rate, too. Deficits matter again because Federal treasuries no longer provide free revenue for the government.
The supply chain problems that Biden talks about involve the international infrastructure. And the Federal government can't address that international infrastructure without ballooning deficits. The United States is dependent upon the shipping capacity of the Panama and Suez canals. The United States is dependent upon shipping ports in foreign countries. And the United States is dependent upon cargo ships operating under foreign registry. Private business in the United States has become so dependent upon just-in-time foreign supply that any disruption rapidly reverberates through the economy. The United States has become a passive consumer of foreign goods which relies on an international infrastructure for supply.
Biden also has raised the tired old pandering politics of taxation. Increasing taxes on business contributes to inflation. The United States is a consumer economy and not an exporting productive economy. In the United States domestic consumers provide the money for everything; including the money to pay business taxes. And the Federal government cannot utilize consumers to inject more money into the economy to give a false appearance of growth and prosperity because deficits have become more costly. If the United States is going to address supply chain problems then a better approach would be tax incentives to replace foreign supply with domestic supply. Biden's pandering to increase taxes on domestic business would actually make the situation worse.
Biden says he has a plan but the seeded opinion piece actually demonstrates that Biden is just winging it. Biden is only trying to push political buttons. Biden isn't doing anything substantive to address the issues in a competent manner. Biden is letting the experts handle everything but doesn't acknowledge that those experts were selected for political reasons and for their political ability. The experts Biden is relying on have not been selected for their competence in managing problems. Our ship of state is adrift without any leadership to follow a plan, let alone create a plan.
Too many facts can dumb-found quite a few people.
We've grown so complacent we expect others to do the thinking for us.
Facts are like stones. A stone has an undeniable presence. But a stone doesn't do anything of its own accord. We can toss stones around without accomplishing anything other than increasing the chance tripping over one and falling on our face. A stone only has value for us if we do the planning, thinking, and work to give the stone a purpose.
Biden is throwing facts like throwing stones. The facts won't do anything of their own accord. And just throwing facts, like throwing stones, only means there's a greater chance of falling flat on our face.