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Hey, Evers, Biden! It’s inflation, stupid

Empower Wisconsin  | June 30, 2022

MADISON — The one thing that almost everybody  — Republicans, Democrats, Independents —can agree on in the latest Marquette University Law School poll is that inflation is a big, big problem.

A whopping 95% of respondents said they were at least somewhat concerned about inflation, with 75% saying it was their top concern.

In May, the U.S. inflation rate hit 8.6%, at its highest rate in more than 40 years. From record prices from the pumps to the grocery store, the average American consumer is getting hit where it hurts.

Those surging prices are costing the average family an extra $460 a month, according to an analysis by Moody’s Analytics senior economist Ryan Sweet.

And high inflation isn’t expected to ease anytime soon, despite the Federal Reserve’s aggressive stance on interest rates. The big driver is the drunken government spending over the last two years, and it seems big spenders like Gov. Tony Evers haven’t taken the painful hint.

Evers wants to pass out $150 to every man, woman and child in the state. His answer to soaring prices. He pitched a plan that would have siphoned $1.7 billion from the state’s projected hefty surplus to pay for his election-year gimmick and more government spending. The Republican-led Legislature stopped him, reminding the Democrat the federal government’s spending binge is how we got into this rising price pickle to begin with.

California doesn’t have a voice of reason. The Left Coast state recently announced a $9.5 billion “relief package” that would send checks of between $200 and $1,050 to about 17 million families. It’s billed as “Inflation Relief.”

As Bloomberg reports,  Colorado, Maine, Indiana and Delaware and other states are implementing such measures in the name of inflation-fighting. Spending billions of dollars more in the pursuit of rising prices isn’t simply Quixotic, it’s like throwing gasoline on the inflation fire, economists say.

“State and local governments do have a rosy near-term fiscal outlook, which is allowing them to continue to spend and support,” Michael Pugliese, an economist at Wells Fargo & Co, told the publication. “It’s hard to make a sweeping statement, but at the margin if you already have very high inflation, additional spending could make the Fed’s job harder.”

It’s Economics: 101. A flood of money, as it has to date, will drive more spending and increase demand, offsetting the Fed interest-rate hikes meant to curb rising prices.

But far left California Gov. Gavin Newsom is doing his best Alfred E. Neuman — What, me worry?  Newsom’s spokesman told Bloomberg the governor believes the inflation stimmies will have “minimal effect on inflation” because it’s not ongoing relief “and by comparison is dwarfed by the size of the federal assistance provided during the pandemic.”

Newsom and crew also insist income caps in the relief package will limit the impact on spending.

“But it is still effectively boosting demand without increasing supply and all else equal would still lead to higher prices,” Laura Ratz, economist at Moody’s Analytics, told Bloomberg.

It’s no wonder income-sucking inflation is the No. 1 worry facing Wisconsin and national voters. Just 37% of Marquette Law School poll respondents said Wisconsin in on the right track. That number is an abysmal 14% in a new survey from The Associated Press-NORC Center for Public Affairs Research released Wednesday. Eight in 10 Democrats believe the U.S. is heading in the wrong direction.

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