Kamalanomics and Its Impact on Inflation in America
In a recent interview with CNN, Vice President Kamala Harris lauded the success of Bidenomics, claiming that it has successfully reduced inflation. However, the Bureau of Labor Statistics' latest Consumer Price Index (CPI) stands at 2.9%, a significant increase from the 1.4% annual inflation rate when the Biden-Harris administration took office. Since January 2021, inflation has risen by over 20%.
Blame Game and Inflation
The Democrats attribute the inflation to factors such as the ongoing war, the pandemic, and the concept of supply chain disruptions. However, this explanation hasn't gained much traction, as most commodity prices have declined and supply tensions have returned to normal, while prices continue to rise. Harris has pointed the finger at greedy grocery stores and corporations, blaming them for inflation and advocating for price controls. Interestingly, she takes credit when price inflation drops.
Inflation: A Hidden Tax
The Kamala Harris plan, like those of many interventionist governments, promotes inflation, which acts as a hidden tax. Governments encourage inflation by printing money, running deficit budgets, and implementing regulations that stifle trade, competition, and creative destruction through technology. Inflation allows governments to deceive citizens into thinking they can provide for everything. It masks accumulated debt, subtly transfers wealth from the private sector to the government, and makes citizens reliant on government subsidies.
Deficit and Debt Accumulation
Harris is unlikely to take measures to curb inflation, as it helps mask the enormous deficit and debt accumulation. The deficit has skyrocketed to $1.5 trillion in the first ten months of the fiscal year, with public debt reaching $35 trillion. The administration's forecasts predict a $16.3 trillion deficit from 2025 to 2034. This figure doesn't account for the $2 trillion in additional debt expected from Harris's economic plan.
Monetizing Debt and Eroding Dollar's Value
Harris's proposals, including an unrealized capital gains tax and other tax increases, are unlikely to generate the $2 trillion in additional taxes she seeks. As a result, she needs the Federal Reserve to monetize as much debt as possible, eroding the purchasing power of the US dollar and impoverishing Americans in the process. This strategy allows the government to blame corporations and grocery stores for inflation and present itself as the solution to the problem it created.
Government's Role in Inflation
Contrary to popular belief, governments, not corporations, landlords, or grocery stores, are responsible for creating and perpetuating inflation. Even if all corporations, grocery stores, and landlords were unscrupulous and inefficient, they wouldn't be able to increase aggregate prices. Only the government, by issuing and printing more currency than the private sector demands, can cause aggregate prices to rise and continue increasing.
Deficit and Inflation
By acknowledging that the deficit will increase by $16.3 trillion in ten years, the Harris team tacitly admits that they will encourage inflation to devalue the currency in which the debt is issued. This approach will impoverish citizens and result in a significant transfer of wealth from the productive sector to the government, creating a class of citizens dependent on the state.
The Impact of High Taxes
High taxes are not a tool to reduce debt. Instead, high debt and high taxes are tools used by the government to seize wealth from the productive sector and create a subclass of dependent citizens. In this system, wealth is redistributed from the middle class to bureaucrats, not from the rich to the poor.
Harris' Economic Plan
Harris's economic plan aims not to reduce inflation but to perpetuate it. This policy mirrors Argentina's 21st-century socialism and threatens the status of the US dollar as the world's reserve currency. Confidence in a currency is not determined by the government, and when it declines, it does so rapidly. Claiming that a crisis won't occur in the US simply because it hasn't happened yet is akin to driving at 200mph and saying, "We haven't crashed yet; let's speed up."
Bottom Line
The economic plan of the current administration, dubbed "Kamalanomics", is a subject of intense debate. While the government claims it's working to bring inflation down, critics argue that it's only serving to perpetuate inflation and increase the deficit. The impact of these policies on the average American and the future of the US economy remains to be seen. What are your thoughts on this issue? Feel free to share this article with your friends and engage in a discussion. Don't forget to sign up for the Daily Briefing, which is available every day at 6pm.
