My May 7, 2021 column accurately forecast the inflation, rising interest rates, and rising government debt service long before the Biden administration even acknowledged the risks were real.
When former Democratic Treasury Secretary Larry Summers warned Biden that his rescue bill was inflationary and six times the amount needed, Biden's biographer Franklin Foer reports that "Biden called Summers and unloaded on him. His younger aides, many of whom had worked for Summers in the Obama administration, pumped their fists when they learned about the president's fiery rebuttal. Biden had put their old mentor in his place." Even as Biden overstimulated demand, he moved to restrain supply.
As the Fed was forced to whip up rates to cure the Biden inflation, the U.S. long-term bond market suffered its worst annual losses since the Napoleonic Wars in 1803, a decline of 53% for 30-year U.S. Treasury bonds between March 2020 and October 2023.
The Biden administration now desperately seeks to avoid blame for U.S. inflation by pointing to the inflation in Europe, much like a fifth grader's "Everybody is doing it" defense.
Even green energy projects may have perversely suffered under Biden as, the Wall Street Journal reports, "Clean-energy stocks have fallen out of favor, with the pressure created by rising interest rates outweighing supportive government policies." Finally, even if current monthly economic numbers are acceptable, the cumulative harm and price increases that have already occurred under Biden are unlikely to reverse and so will live on like a giant weight around America's collective neck.
Biden's economic legacy - the "Biden Burden" - will be that he made Americans poorer than they should have been, and needlessly moved America to a world of higher interest rates on a larger government deficit.
Biden's higher interest rates will continue to increase debt service costs as old government debt rolls off and is replaced at higher costs.
https://www.realclearpolitics.com/articles/2024/02/24/the_lasting_damage_of_bidenonmics_150552.html
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