Is the Biden administration primarily responsible for the recent rise in inflation?
By Jacob Alabab-Moser
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NO
Biden's COVID-19 stimulus spending is not the primary cause of recent inflation. Pandemic-related government spending began under Trump to protect the country from COVID-19's economic fallout. Moreover, research across 80 countries in the postwar period by economists Son Hang and Casey Mulligan found "little relation between inflation and nonmilitary government spending."
Last month, Federal Reserve chairman Jerome Powell discussed the factors driving inflation, citing:
- Supply bottlenecks due to pandemic-related disruptions in global production and trade.
- Labor shortages, which lead to supply shortages due to decreased productivity.
- Increased demand "as the economy continues to reopen and spending rebounds."
Powell opined that the inflation is temporary: as supply chains are restored, "inflation is expected to drop back toward our longer-run 2 percent goal."
In a recent poll, 62% of Americans said Biden was "somewhat" or "very" responsible for increasing inflation.
This fact brief is responsive to conversations such as this one.
Sources
National Review Inflation Is Not Biden's Fault
Associated Press Trump signs massive measure funding government, COVID relief
Federal Reserve System Testimony by Chair Powell on coronavirus and CARES Act
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