How Inflation Could Get Worse With Biden And Other Political Influences

Americans are still feeling the sting of inflation, and although President Biden and other political figures are trying to help ease the burden, experts believe they will only make things worse in the long run.

Biden has released U.S. oil reserves, allowed a year-round sale of cheaper fuel containing ethanol, and outlined other methods his administration plans to use to combat inflation. He also plans to recruit more truckers to address supply chain issues and make longer-term investments in critical materials.

Meanwhile, governors across the country have made attempts to address inflation for their residents with gas tax holidays, income tax cuts, and rebates.

However, experts predict these attempts will only cause further financial strain on the American people.

“Economy 101 is when you have demand-induced inflation, you don’t cut taxes,” said Howard Gleckman, a senior fellow at the nonpartisan Tax Policy Center.

“Because when you cut taxes, all you are going to do is give people more money to spend, and it’s going to increase demand. That’s not a great idea.”

While it is beneficial to provide targeted assistance to those who are struggling to buy essential items, aiding everyone could worsen inflation.

“There’s a real political issue. If you are handing out money, everybody wants it,” said Diane Swonk, a chief economist at Grant Thornton. “The more you give it to everybody, the less targeted it is and the more it perpetuates inflation.”

While Biden intends to let the Federal Reserve do its part to ease inflation, on Friday, he called on Congress to take action.

“I’m doing everything I can on my own to help working families during this stretch of higher prices. And I’m going to continue to do that,” he said. “But Congress needs to act as well.”

Biden believes that enacting several tactics, including reducing the deficit, reforming how the IRS collects taxes from Americans, and the way corporations and billionaires pay taxes, will ultimately ease inflation.