https://www.wsj.com/opinion/kamala-harris-economic-record-bret-baier-donald-trump-2024-election-ff512ff4?st=Zyfysc&reflink=article_copyURL_share A nearby chart shows the inflation trend during the Trump and Biden presidencies. Inflation averaged 2.1% annually between 2017 and 2019, compared to 5.1% under Mr. Biden. (Inflation declined to 1.2% in 2020 amid the Covid lockdowns.) Deficits totalled $2.4 trillion during Mr. Trump’s first three years compared to $5.8 trillion during Mr. Biden’s. Some of the $3 trillion in Covid spending during 2020 no doubt contributed to inflation, especially the $900 billion that December when the economy had nearly rebounded to pre-pandemic levels. That bill was a bipartisan mistake. Then in March 2021, Democrats stoked consumption even more with their $1.9 trillion American Rescue Plan Act, even as states were lifting lockdowns and vaccines rolled out. The bill was largely composed of transfer payments, including $1,400 checks per person, $3,600 per child tax credits, an extra $300 a week in unemployment benefits, a 15% increase in food stamps, rental assistance and more. Such handouts discouraged unemployed Americans from returning to work since they could earn as much not working. President Biden further loosened the spending spigot with executive actions, sweetening food stamps and waiving monthly student loan payments. A Congressional Budget Office report this week noted that the 2021 food-stamp boost likely reduced the labor supply since people received fewer benefits the more income they earned. This unprecedented helicopter drop of money, aided by the Federal Reserve, kicked off the highest inflation in 40 years. The same economists who blessed all of that spending now say Mr. Trump is the bigger inflation threat because of his mooted tariffs, restrictionist immigration policies and tax cuts, while they discount the costs of Ms. Harris’s spending agenda.
Some of the $3 trillion in Covid spending during 2020 no doubt contributed to inflation, especially the $900 billion that December when the economy had nearly rebounded to pre-pandemic levels. That bill was a bipartisan mistake. Then in March 2021, Democrats stoked consumption even more with their $1.9 trillion American Rescue Plan Act, even as states were lifting lockdowns and vaccines rolled out.
The bill was largely composed of transfer payments, including $1,400 checks per person, $3,600 per child tax credits, an extra $300 a week in unemployment benefits, a 15% increase in food stamps, rental assistance and more. Such handouts discouraged unemployed Americans from returning to work since they could earn as much not working.
President Biden further loosened the spending spigot with executive actions, sweetening food stamps and waiving monthly student loan payments. A Congressional Budget Office report this week noted that the 2021 food-stamp boost likely reduced the labor supply since people received fewer benefits the more income they earned.
This unprecedented helicopter drop of money, aided by the Federal Reserve, kicked off the highest inflation in 40 years. The same economists who blessed all of that spending now say Mr. Trump is the bigger inflation threat because of his mooted tariffs, restrictionist immigration policies and tax cuts, while they discount the costs of Ms. Harris’s spending agenda.