64 Comments
User's avatar
⭠ Return to thread
Paul K. Ogden's avatar

Isn't the child tax credit ending?

The average federal worker was making $85,000 a year before benefits several years ago, with 1/5 of the work force making six figures. I highly doubt there were any federal workers making below $15 an hour. Maybe state and local government workers, but certainly not federal. Possibly you're referring to federal government contractors? There might be some very low level workers at those companies making below $15 an hour, but they'd be few and far between if anyt.

I'd like to tout Biden's successes, but there is no ignoring that the withdrawal from Afghanistan was completely bungled. And the cause of inflation is not directly because of the pandemic, but the dramatic increase in money supply needed to pay for pandemic relief handed out by government.

Again, I'd much rather have Biden than Trump in office during these difficult times, but we can't be blind to how Biden has failed. Because that's the only way he's going to get better so we can avoid Trump 2.0.

Expand full comment
rlritt's avatar

Inflation is caused by higher wages and low unemployment.

20 years of war in Afghanistan was enough. Trillions of dollars spent on training and arming their soldiers who dropped their weapons at the first sign of trouble. It was time to pull the band aid off.

Expand full comment
Paul K. Ogden's avatar

I'm afraid economists would not agree with you. An increase in the price of one thing means lower prices in other things. Basic macroeconomic. You have to have an increase in the money supply to have inflation. The problem is the money supply has increased dramatically the past 2 years. Most of that is bbecause of bonds floated by the feds to pay for covid relief that was otherwise not funded. That's not a bad cause but it made inflation inevitable.

Expand full comment
rlritt's avatar

Money supply is only one factor in inflation.

Expand full comment
R Mercer's avatar

I am wondering what American political party would not have bungled the Afghanistan withdrawal and I am drawing a blank. trying to think of an American withdrawal from something over the last several decades that was painted as (or was) a success by the demanding standards of punditry and the uninformed American population.

Inflation arises from a variety of sources. As Scott points out in his response inflation results in a disparity between supply and demand. This disparity can arise a variety of ways.

The inflation we are experiencing IS an artifact of the pandemic--even if it solely due to money disbursed by the USG for PANDEMIC relief (which it isn't, as the inflation is a widespread phenomenon)... because the money would not have been disbursed otherwise.

In reality, demand patterns shifted substantially and supply was negatively affected because:

1) People were not expecting the shift in pattern or its size; and

2) Manufacturing and the supply chain are a mess because of the pandemic, making responding to the shift more difficult.

Krugman over at the times has explained some of this quite well, using FED data.

Expand full comment
Scott Gaynor's avatar

There are lots of places in the "federal government" where people make (near) minimum wage - like part-time workers at federal parks, janitorial services at the VA...those people are definitely not making $85k/year.

Inflation is largely due to a lack of supply, not just because people want to pay more (more money in their pockets). Look at just about any industry and you will see that the manufacturers/suppliers can't keep with demand - which is about at pre-pandemic levels. Simple supply not meeting demand.

Expand full comment
rlritt's avatar

There is that too.

Expand full comment