The United States is experiencing inflation not seen since the Carter administration with the relevant indices at a 40-year high. The Democrats know that their time in power is limited. Every poll, even the favorable mainstream media polls, are predicting a political sea change of generational proportions come the midterms. Massive spending and money printing by the government during the Covid pandemic added fuel to the fire of the previous administration’s largesse. Instead of trying to identify the root cause of the problem (see the previous sentence) in true Democrat fashion Chuck Schumer is trying to triple down on more of the same.
The more time people spend in Washington D.C. the more removed from reality they get. How exactly does putting more money into circulation decrease inflation? You do not have to be an economist to understand that more spending devalues the currency. A brief examination of history shows that no government can spend its way out of an inflationary death spiral.
It is more likely that everyone in Congress sees the writing on the wall and is trying to extract as much money from the budget as humanely possible. Debts that cannot be paid will not be paid. The United States is $30 Trillion in debt. In 2019 the Unites States produced roughly $22 Trillion in GDP. Rising inflation will result in rising interest rates which will exponentially increase what it costs to service the United States debt.
It is not outside the realm of possibility that our interest payments will become so high that we may default on our debt. If that happens the recession of 2018 will look like an amusement ride in comparison. There is also the threat of the dollar’s supremacy worldwide faltering.
The United States sanctions on Russia have had the unintended consequence of displacing the petrodollar as the uniform currency for purchasing energy. Russia has demanded that its energy exports be purchased in Rubles, and in a historical first, European countries are complying. If the dollar loses its primacy for international financial transactions the inflationary pressures plaguing our country will only accelerate.
One thing is for certain, Chuck Schumer has no clue how to tackle this complex problem.