By Carrie Sheffield
The Federal Reserve announcing a three quarters percentage-point interest rate hike is an attempt to control inflation, but it’s pushing America closer toward recession.
Behold liberal economic policy bearing fruit as the Democrat-controlled White House and Congress rammed through trillions in new “stimulus” and infrastructure spending in 2021. This new spending helped push U.S. inflation to record levels. (RELATED: SHEFFIELD: Nancy Pelosi’s Incredible Shrinking House Majority)
The Fed also hinted at a more aggressive timeline for rate hikes in coming months, which could push markets deeper into Bear Market territory. Meanwhile, the White House is living in denial, claiming President Joe Biden presided over a “historic economic boom” and that the president is “well positioned to face these challenges.” This is despite Biden’s failure to address the painful inflation and gas prices.
Today’s sharp interest rate hike is the highest since 1994, but Democrat economist Larry Summers claims the Federal Reserve will need to raise rates to 4 or possibly 5% in hopes of tamping inflation. This will push the American Dream of homeownership further away from many young people trying to buy their first house. And it will raise borrowing costs for businesses, particularly hurting small, minority-owned and start-up businesses who are less equipped than bigger businesses to absorb these inflationary pressures.
Yet again, liberals claim to care for the most vulnerable in society but their policies do just the opposite.
Congress this week made some attempts to alleviate our supply chain, with the House passing an ocean shipping bill by an overwhelming 369-42 vote. Biden is expected to sign it into law. But it’s too little, too late.
Leaders anticipate and envision problems in the future, not scramble frantically after the fact. Treasury Secretary Janet Yellen admitted she failed to anticipate the frenetic pace of inflation, last year calling the risk of inflation “small” and “manageable.” Boy was she wrong.
Yellen was also wrong when she claimed that a “big package” of government stimulus was necessary in 2021, falsely asserting that “I think the price of doing too little is much higher than the price of doing something big.” Will Politifact and other self-proclaimed “fact checkers” slap a misinformation label on previous articles with Yellen’s farcical claim? Will they flag Yellen’s pronouncements as misinformation the way they do to conservative officials? Don’t count on it.
This inflation debacle is a classic example of the philosophical difference between liberals and conservatives. Conservatives know that quite often, the supposed “treatment” is worse than the disease. Or as Ronald Reagan liked to quip, “The top nine most terrifying words in the English language are: ‘I’m from the government, and I’m here to help.’”
With November’s red wave poised to place Congress in GOP hands, congressional Republicans are reportedly developing their own proposals to attack inflation, from tax and trade reform to cutting regulatory tape.
Sen. Chuck Grassley (R-Iowa) wants to reform a tax-code provision to account for inflation and cut taxes on investments, while House Republicans want to rescind the billions in unused federal spending. These common sense reforms are the healthier approach to fixing an economy that’s heading off the rails.
Carrie Sheffield is a senior policy analyst at Independent Women’s Voice
