Around $3/gallon in my area of the NW US. Odd that someone comes in complaining about >$5/gallon milk prices in a thread about the economy and it’s impact on Biden but that $5 milk is in Canada. How many Canadians would vote for Biden either way?
If only there was some way to change that. Maybe Canadians could come together and make choices about their leadership that determines such things. Don’t know what they’d call it, though.
But yeah, picking dairy (or eggs, or poultry) as a indication of inflation in Canada is…problematic.
It’s a complete distraction, since his arguments were failing so badly.
“Look! Over here! Expensive milk!”
It’s sort of like the Republicans cherry picking a huge portion of the most expensive cut of beef they can find in the most expensive specialty store and claiming that this is the normal price for ground round.
Yeah. We get it. Prices are up, including prices of many household staple grocery items.
But the stratospheric hyperbole is a bald-faced lie.
“The winged Victory of Samothrace? A 1927 Indian-head nickel!” ??
Why was it nuts? The infrastructure spending was needed, as even the Republicans admitted throughout the Trump years (and then did nothing about, preferring to instead funnel money and tax cuts to the wealthy). The Republicans stopped it not because it was bad for the country but because it was good for the country and they didn’t want Biden to have any wins (see also: pretty much every other bill they’ve blocked).
Good for country
Bad for country
Neither really matters for the party of “No, never, whatever the Democrats say, we’re against it”
What’s wrong with it? First, there is a limit to how kuch you can soend in a given time when unemployment is low and there are supply chain limits. All that spending would have been competing with resources needed for the other big spending programs. That causes inflation, and slows down progress.
These programs also then compete for workers withnthe private sector, driving up costs there too.
It’s also crazy becaue the U.S. doesn’t have the money. Printing an extra three trillion dollars would have added several points to inflation, and to the interest rates needed to defeat it. This would hurt the poor even more.
And that extra $3 trillion borrowed at 5% would add $150 billion to annual debt service costs. Almost twice the coat of the Department of Education for nothing year after year, forever.
It’s also crazy because there is not enough oversight to prevent that money from being wasted on graft and nonsense. And many of the projects are overtly political and won’t help anyone except for the people who landed pork in their districts.
All this infrastructure spending also uses energy, concrete, steel, and other high-co2 emitting products.
Other than that…
It’s funny that we got here because people are arguing that Democrats are more likely to budget responsibly, but here you are defending an attempt by a Democratic president to run up $5.7 trillion in spending on borrowed momey.
And yet Biden’s economic policies have brought inflation dramatically down. 
I think you’re confusing this with the previous administration and their Republican friends in Congress, who actively blocked oversight of the half-trillion slush fund handed to Trump. We still don’t know where a lot of that went, whereas the current spending has full oversight.
Are they? Then why are so many Republicans taking credit for them now?
I mean, I hear the “It’s all pork!” mantra repeated by people who hate Biden a lot, but their claims tend to be low on specifics and high on projection.
So you think we should just let bridges, roads and buildings crumble? Bold policy proposal you have there.
Spending on things that have a high return on investment is budgeting responsibly. And cutting spending for the sake of cutting spending often leads to serious negative economic effects (particularly when combined with nonsensical supply-side policies). It’s funny that we got here because people are arguing that Democrats aren’t budgeting responsibly enough, yet here you are deliberately excluding the benefits of that spending already being realized and attributing the negative effects of the previous administration’s irresponsible spending to this one to boot, while advocating policies that are far more economically damaging.
To add some cites, just because this is the SDMB and presumably someone will actually read them…
We criticize folks for unfairly blaming Biden when the economy is bad. We shouldn’t give him credit when the economy is better. Because he just doesn’t have that much influence.
To be fair, it was never intended to fix current inflation, but it was meant to help it over the long run.
While the law may not have crimped inflation over the past year, it could well do more in that regard going forward, since it just now is starting to be implemented. Along with the CHIPS Act, there are also signs that the Inflation Reduction Act helped to stimulate roughly $500 billion in corporate announcements to invest in new factories. This has potentially helped to strengthen the job market despite efforts to bring down the inflation that many economists believed would pull the United States into a recession. That recession — as Biden predicted — has not materialized.
And Republicans claimed it would actually make inflation worse, and of course they were wrong.
Even though the law did not immediately reduce inflation, it appears to have done little to cause prices to explode upward as Republicans had claimed it would. House Speaker Kevin McCarthy, R-Calif., said last August that Biden’s agenda would push inflation upward, only to have the rate fall over the past year.
“They’ll raise inflation higher,” McCarthy told Fox News in an interview. “They’ll spend more money, which brought us into this problem. “
It wasn’t the IRA that did it. But inflation in the US is markedly lower than in most of the rest of the West (I think Canada’s is lower), and the administration has made a lot of effort toward legislation and policies to enact price reduction and inflation controls (all of which the GOP have tried to block, sometimes successfully).
I suppose that you should give Democrats credit for trying to help curb inflation, but I’m not seeing any evidence they actually have done so. Biden has taken credit for the IRA reducing it, but as I said before it really didn’t, because most of it hasn’t even been implemented yet, and most especially it hadn’t back in August.
I’m unable to find anything credible showing a real cause-and-effect, and I suspect that it’s because there isn’t any. That’s not to say, “Shame on Democrats!” But it’s like blaming a shaman for not making it rain, or giving them credit when it does rain. That’s not really something the shaman can do.
So, for example, his efforts at bringing gas and oil prices down by increasing supply don’t count?
You tell me.
https://www.cnn.com/2022/10/19/energy/gas-prices-outlook/index.html
Okay, it looks like Discourse isn’t previewing that properly. But essentially, no, Biden didn’t bring oil and gas prices down. There were other factors at play. I give him credit for wanting to try, at least.
Now, that was from last year. Biden pledged as recently as a month ago to release more oil to help bring gas prices down.
Looking at this chart, it hasn’t really done anything.
To be fair it has only been a month. But when you’re asking if he deserves credit, obviously the answer is no. He has to do something that actually works first. Yes, I give him credit for trying, and yes, the Republicans are being obstructionists as usual. But there is no evidence he has directly done anything so far to actually affect prices in a positive way.
The strategic oil reserve should be used in an actual supply emergency, not in an impossible effort at price manipulation. There’s a lot of evidence that even OPEC cannot control prices, and the reserve available to a U.S. President trying to manipulate gas prices is far smaller.
It was bad when Trump sold a smaller portion of the strategic oil reserves, and worse when Biden sold a bigger portion. I’ll allow that Biden had a better excuse with Ukraine, and also that this isn’t the most important issue out there. But reserve sales are a legitimate area to criticize Biden on. As an inflation fighting effect, it is make believe.
No they did not. The fed raising interest rates is what got inflation partially under control. The Inflation Reduction Act and the other bills make inflation worse.
The Fed is independent, and Biden has no control over it. Also, don’t be too quick to call inflation dead. If you look at what happened in the 70’s, Inflation went up, interest rates were raised, inflation went down, but then it turned and went up even more. Then it started to go down, and turned around and went up even higher than the last time. People thought inflation had been beaten after two years of rate hikes, but it took a full decade before inflation finally came under control.
Two years ago on this board I said that inflation was not transitory, and that to get it under control would require an application of the Taylor Rule - raising interest rates at least two points above the rate of inflation-GDP growth. That’s what the central banks did in Canada and the US, and now two years later inflation has come down a bit. But it would have come down even more if our governments weren’t borrowing and spending money like crazy.
Inflation came down in spite of Biden, not because of him.
Look at this graph of inflation vs the interest rate, which makes the relationship pretty clear:
The Fed pushed interest rates to zero, and inflation immediately began to tick up. Once inflation got to the pain point, the Fed started hiking interest rates, and inflation started to come down. Interest rates are now well above the inflation rate, which is required to keep inflation down.
And before you declare inflation whipped, you should look at what happened in the 70’s. There wasn’t a ‘bout’ of inflation that we fixed, there was a series of repeated spikes in inflation:
Notice that inflation was over 5% in 1970, and higher interest rates brought it down to around 3%. That’s a good mirror of what has happened to us in the last two years. But notice that as soon as they brought interest rates down inflation went right back up again, this time all the way to 12-13%. Interest rates then had to be raised even higher, and inflation came down. This time, inflation bounced again, and interest rates had to go all the way to 20% to fix it. Also, rates had to stay well above inflation for two decades before inflation seemed to finally be tamed.
Then we forgot everything we learned about how painful inflation is and how hard it is to get it under control, and started printing and spending money at an exponentially increasing rate.
This doesn’t mean we’re going to see a repeat of the 70’s. The economy was quite different then. But it does mean that you shouldn’t take the lower inflation we have now as a sign that the problem is over. Maybe, maybe not. I’d bet not. And the history of interest rate reductions after a bout of inflation is probably what’s got central bankers more cautious this time about lowering interest rates too soon.
I’m pretty confident you can’t back that up at all.
I’m pretty confident I can. First of all, the money will be borrowed. There are some revenue increasing features, but many are back-loaded into the out years.
The ‘green’ spending (369 billion) is inflationary. None of those projects will pay themselves back any time soon, so for now they are additional consumption of money and resources.
The corporate tax increase could be deflationary, or it might not be. It depends on how corporations and the markets respond.
Prescription drug reform? We’ll see. i don’t expect drug prices to change much. But I don’t see it as inflationary or deflationary - just a shift in resources.
The stock buyback tax? I have no idea how that will affect inflation.
IRS audits? Who kmows? I suspect little effect one way or the other.
One thing I will say: This bill is not as inflationary as ‘build back better’ was, and probably won’t have a huge effect on inflation. But it will make debt service more expensive, at least until the revenue features start showing up in the last five years of the 10 year CBO scoring period.
The IRA is a climate change bill, dressed up as an inflation bill to get political support.
Now granted, whether you think it will or will not reduce inflation is going to depend on your priors and what side of the political aisle you are on. Democrats see increased IRS enforcement and higher corporate taxes and think that it’s raising revnue and therefore deficit reducing and therefore anti-inflationary. On the right, they tend to see it as businesses being mired in more red tape, compliance coats shooting up, and a subsequent supply reduction, making inflation worse.
The truth is that this particular bill is going to have a small effect on inflation, regardless of the direction. It will be swamped by fiscal choices made in subsequent yers and by fed policy.
What do you think is te most deflationary part of the bill? And why?
…And then you don’t. We need cites, Sam, not your personal opinion.
No, I’m giving you my personal opinion. I’ve been citing plenty, and they just get ignored.
And you didn’t answer my question: What do you think is the most deflationary part of it? Oh, and cite, please. Sauce for the goose, and all that.