The 2024 election has become so flippin’ boring! We know Trump will be incoherent and Harris will echo Biden and that is about it.
This election season the candidates are giving inflation a lot of lip service….one says if elected he will end inflation on day one….the other is not so precise.
But can a president really do, do they have the power to end inflation?
Now that is a question that anyone worried about inflation should be asking of their candidate and ask for specifics after all words are cheap.
The Kiplinger Report takes a look at what is involved with inflation and what a president can do….if anything.
Inflation.
It killed the presidencies of Jimmy Carter and Gerald Ford, relegating both to the status of a one-term president. And broad dissatisfaction with post-pandemic inflation weighed heavily on President Joe Biden’s popularity … and may have been one of the factors in his decision not to seek a second term.
But is inflation really a president’s fault? And what, if anything, can a commander-in-chief do to fix it?
The relationship between inflation and the man or woman in the White House is complex because inflation itself is complex. And while the president cannot control inflation, per se, they can certainly influence it.
So, let’s break it down, starting with what drives inflation.
Inflation is the rate at which prices rise over time. Or, put differently, it measures how much your money is worth relative to the goods and services you can buy with it.
The reasons for inflation are varied, but ultimately, they all come down to basic supply and demand. That’s how all markets work. When demand is higher than supply, prices rise to compensate. Likewise, when supply outpaces demand, prices fall.
Both aggregate supply and aggregate demand can be influenced by government policy, though not necessarily by the president.
https://www.kiplinger.com/personal-finance/inflation/can-a-president-fix-inflation
As you can see the Federal Reserves is where inflation has it’s start….government policies can have an effect one way or the other but a president cannot end inflation on his/her own.
“But it’s also not within the president’s power alone to control inflation and it’s not realistic to expect it. “
Think about this….the Fed is lowering interest rates will that drive inflation to rise….after all we are sitting at 2.9% or so the reports go.
Know what you are voting for in the upcoming election….do not vote for idle words.
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People attribute far more power to the office of president than it really has. The president doesn’t make laws, doesn’t control spending, doesn’t make the budget, etc. It is Congress that does all of that. The only thing the executive branch has any control over is how the laws passed by Congress are implemented.
The prez can submit a budget but Congress must approve….the prez is just not that powerful chuq
Exactly. The executive branch has some control over how the laws are implemented, but ultimately it is Congress that makes the laws and controls spending.
It seems to me that Harris has passed Biden in going left.
To me she is going Right….just on Capital gains tax….Biden wanted 39% Harris is calling for 23%….that alone tells me she is bowing to corporations. chuq
It isn’t just the wealthy who are subject to capital gains taxes, though. I am far from rich but a lot of my income is subject to capital gains taxes these days.
I did not mean they were the only ones just that they would benefit far more than you or I….for I also have my gains as well chuq
Inflation is not controlled by government policy, whatever any news pundits or politicians may claim. But it is affected by government borrowing. The banks ‘invent’ non-existent money to loan to the government, and when that debt reaches a level that no government can ever repay they are forced to either submit to interest rate changes or deliberately devalue the currency. The fault lies with the big banks and financial institutions who make huge profits by lending money that never existed in the first place, then getting real tax dollars in return.
Best wishes, Pete.
Is your ‘Exchequer’ like our Fed? chuq
Not sure, chuq. This is what it does.
The UK government raises money through taxation to fund public services and spending priorities. The UK Exchequer is involved in several aspects of the UK government’s finances, including:
Taxation
The Exchequer Secretary to the Treasury is responsible for the UK’s tax system, including income tax, VAT, customs, and international tax issues.
Budget
The Chancellor of the Exchequer makes statements on fiscal policy and tax and spending decisions, known as “fiscal events”. The Budget is followed by four days of debate on the Budget Resolutions, which are the tax measures announced in the Budget.
Bank of England
The Chancellor of the Exchequer has influence over the appointment of the Bank of England’s Governor and Deputy Governors, and can appoint four of the nine members of the Bank’s Monetary Policy Committee.
Office for Budget Responsibility (OBR)
The OBR publishes forecasts for the economy and public finances, including a detailed costing of the government’s tax and welfare spending.
The term “Exchequer” comes from the resemblance of the table used for government financial business to a chess board. The spaces on the table represented pounds, shillings, and pence.
Thanx for the lesson…I was not sure what it did…..chuq
The only influence I can see the president has over inflation is his power of persuasion to influence congress, the federal reserve and public opinion.. He can do that by appearing directly to them, or to the public. If he can change public opinion, it can influence how congress votes on matters that will affect inflation.
Congress and the federal reserve can act to influence inflation in mist cases. There are times they can’t. For example when covid hit and stopped the supply chains, goods were scarce and prices went up. Lack of supply can cause inflation.
Nowadays I think we are giving public opinion too much credit….it cannot compete with the buckets of cash from special interests. chuq
A good example of that is gun control laws.
Perfect example….good one…..chuq
This is off the subject but I thought of that because of the school shooting in Winder. Forty miles from me. Parts of my family have lived in the area for generations and some close family still live there. That is like part of my home. Never thought it would happen here.
It has become and all too familiar report….and people are starting to be blase about them…..and there is that lame ‘thoughts and prayers’ thing. chuq
You share important points that people don’t seem to want to understand…and sadly, the screaming and shouting news that we get never discusses an issue – just uses it for “clicks”
That is why I am here….I want people to try and see both sides and the promises that will seldom come to reality. chuq
The Trumpian vision of ending inflation is to take control of all the finances of the country and funnel all available money to the top and let the peons scramble among the garbage cans for scraps.
Do not forget the craziness of tariffs…..like an extra tax on the peasants. chuq
The price of imported crude oil drives inflation beyond other meek possibilities. Gas goes up, transportation of goods must go up and prices go up.
If we blame gas and the US is not a oil exporting country why is it not cheaper here? chuq
Sorry that should be ‘now an oil producing’…..sorry about that chuq
State, local and federal tax on gas and tires add a big chunck to pump price. Recall when Hillary suggested a price tax increase when gas went down ? Her reasoning was “since the fools are already used to paying the price , then it would be the perfect time to increase taxes due to gas price drop and the consumers wouldn’t know the difference. Perhaps it is not cheaper because prices for everything have gone up. Is that due to inflation or is it merely an “upward price adjustment” for business profit. After time everyone takes the new prices as normal. Then the real adjustment is the household budget.
As far as Clinton’s words….she lost and should be forgotten. It is always about profit…..billions hang in the outcome…..chuq