Biden’s Fight Against Inflation Is Failing Homeowners
The president and congressional Democrats are relying on the Federal Reserve to bring down prices by raising interest rates.
They could have done more.
Photographer: Ting Shen/BloombergThe causes of inflation can be hard to isolate, but in the US at least, one culprit is clear: President Joe Biden and congressional Democrats spent too much in the last two years, and even now refuse to take steps that would ease the problem.
Economists usually think of inflation as coming in one of two ways: from the supply side or from the demand side. The former is when an important input — such as microchips for automobiles — is in short supply. That drives up prices, usually but not always temporarily. The latter is when a combination of excessive government spending and low interest rates creates more demand for goods and services than the private market can produce. This type of inflation is self-sustaining unless the government cuts spending or the central bank raises interest rates.