The Biden administration is working overtime to answer for a failing economy. “We’re not done working to lower costs for families,” the President tweeted this week. 

American wallets are feeling the pain of Biden’s economic plan, from the gas pump to the housing market. According to the Labor Department, inflation soared 8.5% over the past year. The Consumer Price Index (CPI), which measures the change in prices for everyday items like food, clothing, shelter, doctors’ and dentists’ services, and other goods, shows a 9.1% increase. These inflation increases are the highest since 1981. 

Just ahead of the release of the annual CPI last April, White House Press Secretary Jen Psaki warned inflation might be “elevated due to ‘Putin’s Price Hike.’” The Biden administration relies on the so-called “Putin Price Hike” to blame soaring gas prices on the Russian invasion of Ukraine disrupting global markets. Yet the Daily Signal reports, “Inflation increased a whopping 7.5% and 7.9% in January and February, respectively, before Putin ever ordered Russian troops to assault Ukraine.” Worsening inflation has become a hallmark of the Biden administration. The president’s empty rhetoric to respond isn’t easing the burden, either. Here’s what you need to know to combat liberal lies about today’s economy. 

1. Who is causing worsened inflation? 

Inflation is not new to the U.S. Throughout the Revolutionary War, America’s Continental Congress failed to pay its war debt. Afterward, Congress printed so much paper money that it was virtually worthless. Alexander Hamilton saved the day by putting the paper money on a gold standard; American-issued currency remained less in circulation until the American dollar regained value. But in 1971, President Richard Nixon took the U.S. off the gold standard. Today, the government can print money essentially at will. The only thing giving the dollar value is, as Steve Forbes of Forbes Magazine puts it, “faith.”

“Money is a facilitator of trust. Without that trust, trade, social relationships, and life as we know it ultimately unravel,” Forbes says. 

Monetary inflation causes money to lose value. Price increases do not reflect goods and services becoming more valuable; they reflect money becoming less valuable. Both Democrats and Republicans overspend on the federal and local governments. Cronyism, or government interference in capital markets, often involves spending what we don’t have. Even President Trump called for additional government spending during the COVID-19 pandemic. His logic was that if the government shut down the economy, it was the government’s job to help with recovery. This mindset receives bipartisan approval. Trump approved $900 billion in COVID relief. 

The American government can, of course, levy funds in a crisis such as a pandemic. The government can even borrow money during an emergency and pay it back. The problem arises when it continues to borrow after a crisis or when there is no crisis. Upon entering office, President Biden called for another $1.9 trillion for COVID-related relief funding. Adjusted for inflation, this total is more than the amount the government spent on the Revolutionary War, the Civil War, World War I, World War II, the Louisiana Purchase, the Transcontinental Railroad, the Interstate highway system, and the Moon Landing combined. 

2. Can Biden’s American Rescue Plan save us from inflation? 

In the first 100 days of his presidency, Biden’s American Rescue Plan included $3.5 trillion spending on free child care, student loan forgiveness, free community college, and expanded Medicare and Medicaid. The 2,700-page infrastructure bill put forth by Democrats totaled $1.1 trillion. In an interview last year, Brian Deese, director of the National Economic Council at the White House, said, “It’s been a while in Washington that we’ve actually tried to responsibly pay for what we’re doing. That’s a core of the proposals we’ve put forward.” 

Unfortunately, President Biden continues to tell lies about the American economy. In a recent Wall Street Journal piece, the President claims before the pandemic, America’s economy “worked best for the wealthiest Americans.” In actuality, income over the past forty years for the lower, middle, and upper-income families has seen an overall rise. Adjusted for family size parameters and inflation, what would qualify as a middle-income in 1980 would be considered a lower income today. 

3. How is the Federal Reserve hurting everyday Americans? 

“I ran for president because I was tired of the so-called trickle-down economy,” Biden continues in the Wall Street Journal. The Biden administration claims to fight for working families. Biden has accused Trump of too often “demeaning” the Federal Reserve, America’s central baking system. Supposedly, this is why the Fed was not allowed to tackle real economic issues during the pandemic. Joel Griffith, an economic fellow at the Heritage Foundation, offers a different perspective on the last two years: “Politicians approved the trillions of spending and bailouts while the Fed financed it.”

Conservatives should be aware that the Federal Reserve may be too woke to handle real economic issues. In terms of political affiliation, Democrat employees outnumber Republicans at the Fed. Recently, the Federal Reserve has focused on social justice issues rather than its real job: supporting price stability and employment in the U.S. The Federal Reserve System was established in 1913. In a 2021 letter to the Federal Reserve Bank of San Francisco, Sen. Pat Toomey (R-PA) observes over the past century, the Fed has acted in a nonpartisan way to achieve its goals. The Federal Reserve analyzes economic data, including “capital flows, asset prices, and employment, in support of the Federal Reserve’s monetary and regulatory policy duties.” 

Federal resources are now being diverted in America’s central bank. Toomey says the Fed has been “engaged in research on social policy topics reflective of the political and normative leanings of unelected Federal Reserve Bank officials.” In San Francisco and other Federal Reserve banks, employees have written social justice studies on health coverage, white privilege, the correlation between race and COVID-19 infection, and overcrowded housing. Toomey responded that other agencies deal with these issues: the Department of Labor, Equal Employment Opportunity Commission, the National Labor Relations Board, the Department of Health and Human Services, and the Department of Housing and Urban Development. If the Fed truly wanted to assist the underprivileged, focusing on economic issues within their designated purview would be a start.

Democrats have said economic recovery has slowed due to the COVID-19 pandemic. This may be true in some respects, but it also varies by state. The Federal Reserve State Coincident Indexes approximates state gross domestic product. One index shows state economic output in 2021 was actually better than pre-pandemic levels in Georgia, Missouri, Utah, Nebraska, Alabama, South Dakota, and Mississippi – notably states that avoided total pandemic shutdowns. States like New York, Hawaii, and Illinois remain in recessions. New York City saw 8.8% unemployment by the end of 2020, while states with fewer restrictions averaged 4.7% unemployment. 

The president agrees inflation is a top priority yet is doing everything he can to further government interference in the American economy. The Biden administration will continue to fail at addressing inflation because they do not understand this simple principle: inflation is only made worse by government mismanagement.