Over the course of the four years former President Donald Trump was in office, minus the pandemic portion, the American economy was pumping and consumers were healthy, happy, and looking forward to the future.
According to the Daily Caller, under President Joe Biden, the outlook is vastly different. New numbers from The Wall Street Journal indicate that Americans will suffer from a period of several years of inflation, marking the sharpest inflation increase since the 1990s.
“Inflation is expected to surge longer and longer — longer than the Fed previously thought,” Grant Thornton chief economist Diane Swonk.
What’s going on?
To begin, in the final months of 2021, prices are expected to be 3.2% higher than they were at the end of 2020. But the real bad news is well beyond 2021.
According to data taken from a survey of economists, prices overall are expected to rise, on average, 2.58% every year for the next three years.
Joel Naroff, chief economist at Naroff Economics, told the Journal: “We’re in a transitional phase right now,” adding, “We are transitioning to a higher period of inflation and interest rates than we’ve had over the last 20 years.”
“I’m not saying hyperinflation is around the corner, just that a lot of things have come together in the last year, and the overall trend of costs across the board is growing faster than in the last five or 10 years,” said American Chemistry Council chief economist Kevin Swift.
Swift added that he believes the Fed could be behind-the-curve as far as preparation on how to deal with continued inflation, which obviously doesn’t help matters.
While the trend began taking a wrong turn over the summer of 2020, as closures and shutdowns wreaked havoc on the American economy, many are still laying a majority of the blame on Biden, as they claim that his aggressive and unbelievably costly legislative ideas — to the tune of trillions — have further aggravated the inflation problem.
“The 100% cause of inflation is the government,” remarked Peter Schiff, the chief economist and global strategist at Euro Pacific Capital. “It’s when the government spends money that it doesn’t collect in taxes and then the Federal Reserve monetizes the resulting deficits by printing money.”
Adding to the overall grim picture is the fact that the Federal Reserve has kept interest rates low throughout the pandemic in order to spur economic activity, which works, but can also trigger rapid inflation as a result.
Economists are hopeful that soon-to-be-published new numbers of the Consumer Price Index (CPI) will bring good news, but as it stands, it looks as though high prices at the pump, the grocery store, and virtually everywhere else are here to stay for the time being.