Inflation is still stinging Americans, and while President Biden and other politicians are attempting to alleviate the problem, analysts say they will just make matters worse in the long run.
Biden has announced the release of US oil reserves, the year-round sale of cheaper ethanol-based fuel, and other measures his government expects to take to battle inflation.
He also intends to hire more truckers to help with supply chain concerns and to invest in crucial commodities over the long run.
Meanwhile, governors around the country have used gas tax holidays, income tax cuts, and rebates to try to combat inflation for their citizens.
He also plans to hire more trucks to help with supply chain issues and to make long-term investments in critical commodities.
Experts, on the other hand, believe that these efforts will just put the American people under further financial burden.
“Economy 101 says you don’t cut taxes when there’s demand-induced inflation,” said Howard Gleckman, a senior fellow at the independent Tax Policy Center.
“Because when you decrease taxes, you’re just giving people more money to spend, which increases demand.” That’s not a good plan.”
While it is commendable to provide targeted assistance to people who are struggling to afford basic essentials, supporting everyone risks exacerbating inflation.
“This is a major political problem.” “If you give money out, everyone wants it,” said Diane Swonk, a principal economist at Grant Thornton. “The more you distribute money to everyone, the less focused it gets, and inflation persists.”
While Biden intends to let the Federal Reserve do its job of decreasing inflation, he is urging Congress to act by Friday.
“On my own, I’m doing everything I can to help working people at this period of rising prices,” says the author “he stated, “Congress, on the other hand, must act.”
“Because when you lower taxes, all you’re doing is giving people more money to spend, which will drive up demand.” That isn’t a good idea.”
While providing targeted support to individuals who are struggling to buy basic necessities is commendable, assisting everyone risks worsening inflation.
“This is a serious political issue.” “If you dole away money, everyone wants it,” said Diane Swonk, a Grant Thornton principal economist. “The more you give it to everyone, the less focused it becomes and the more inflation continues.”
While Biden plans to allow the Federal Reserve to do its role in lowering inflation, he called on Congress to act on Friday.
“On my own, I’m doing everything I can to assist working families at this period of rising prices.” And I’m going to keep doing it,” he said. “However, Congress must also take action.”
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Biden believes that decreasing the deficit, revamping the way the IRS collects taxes from Americans, and changing the way firms and billionaires pay taxes will all help to lower inflation.