Stop the spending
A year ago, the Federal Reserve forecast that inflation would increase by 1.8 percent in 2021. Instead, consumer prices jumped 7 percent — the highest rate since 1982. Some of this unanticipated inflation was driven by knotty issues such as supply chain disruptions, rising energy prices, and shifts in demand to sectors with less capacity to maintain low prices.
Yet Washington poured gasoline on this fire by enacting the $1.9 trillion American Rescue Plan in March. This surge in spending is a key driver of higher prices faced by consumers. To combat it, lawmakers should begin paring back portions of the remaining $500 billion in scheduled spending from the rescue plan, put Biden’s Build Back Better legislation on the back burner and resist new spending sprees.
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Brian M. Riedl is a senior fellow at the Manhattan Institute. Follow him on Twitter here.
This piece originally appeared in The Washington Post