By Catherine Rampell
Columnist |
May 19, 2022 at 5:22 p.m. EDT
Psst: Republicans don’t have a plan to fight inflation, either.
Some of my recent columns have criticized Democrats’ approach to inflation, both their reluctance to take steps that could be modestly helpful (repealing tariffs, accelerating legal immigration applications); and their flirtation with policies that could be actively harmful (such as price controls or measures that would discourage companies from increasing production).
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Some people have, quite reasonably, asked: What then do you think of Republicans’ plans for reducing prices?
Unfortunately, hard to say. Because they don’t exist.
Republicans have expended lots of energy and ad buys blaming Democrats for inflation. And it’s true that fiscal (and monetary) policy has helped run the economy “hot.” There have been some happy consequences from these choices: President Biden’s stimulus bill in March 2021 likely helped reduce unemployment much faster than predicted, which prevented some of the long-term “scarring” workers experienced after the Great Recession.
But there have been trade-offs. By juicing demand at a time when supply chains remained snarled by covid-19, government stimulus likely pushed inflation a little higher.
Catherine Rampell: Democrats need more tough love on their misguided economic policies
This isn’t the only factor driving inflation; other countries are also facing high price growth, and they didn’t pass Biden’s American Rescue Plan. Rather, they’re facing the same supply-side constraints we are. A series of supply shocks in recent months, such as the war in Ukraine, has also made global inflationary pressures worse, particularly for energy and food.
Columnist |
May 19, 2022 at 5:22 p.m. EDT
Psst: Republicans don’t have a plan to fight inflation, either.
Some of my recent columns have criticized Democrats’ approach to inflation, both their reluctance to take steps that could be modestly helpful (repealing tariffs, accelerating legal immigration applications); and their flirtation with policies that could be actively harmful (such as price controls or measures that would discourage companies from increasing production).
Sign up for a weekly roundup of thought-provoking ideas and debates
Some people have, quite reasonably, asked: What then do you think of Republicans’ plans for reducing prices?
Unfortunately, hard to say. Because they don’t exist.
Republicans have expended lots of energy and ad buys blaming Democrats for inflation. And it’s true that fiscal (and monetary) policy has helped run the economy “hot.” There have been some happy consequences from these choices: President Biden’s stimulus bill in March 2021 likely helped reduce unemployment much faster than predicted, which prevented some of the long-term “scarring” workers experienced after the Great Recession.
But there have been trade-offs. By juicing demand at a time when supply chains remained snarled by covid-19, government stimulus likely pushed inflation a little higher.
Catherine Rampell: Democrats need more tough love on their misguided economic policies
This isn’t the only factor driving inflation; other countries are also facing high price growth, and they didn’t pass Biden’s American Rescue Plan. Rather, they’re facing the same supply-side constraints we are. A series of supply shocks in recent months, such as the war in Ukraine, has also made global inflationary pressures worse, particularly for energy and food.