Excess government spending forces inflationary pressure

As Milton Friedman once said, “Inflation is always and everywhere a monetary phenomenon.” That is, when the government prints more money, the value of money decreases, and prices rise. That’s exactly what we’ve seen. Federal debt has severely accelerated since 2020, and now approaches $30 trillion. Congress’ numerous COVID relief measures will have a $5.14 trillion impact on our debt. How did the government pay for this spending binge? By printing money. The U.S. money supply has increased by approximately 40 percent since March 2020. Multiple studies find that the dramatic increase in federal “stimulus” payments, which gave individuals more spending cash and paid them to not work, exacerbated inflationary pressures. Washington politicians pretend they don’t know what’s behind runaway inflation, but voters know. To paraphrase James Carville, “It’s the spending, stupid.” What can policymakers do? While it’s impossible to put the toothpaste back in the tube, there are measures to decrease inflationary pressures. That starts with fiscal restraint. Lawmakers at the federal, state, and local levels need to control the runaway growth of government spending. They must resist the urge to overspend now and give out “free money” in an election year, and should work to enact guardrails on government spending, like the Taxpayer Protection Act, which controls the growth of state government spending. Lawmakers should enact tax reform that eases burdens on working families and enables small businesses to hire workers and raise wages. They should seek permanent reform that increases economic competitiveness and reject short-term gimmicks. Lastly, comprehensive regulatory reform would help manufacturing and producers control costs and unleash energy production to lower electricity and fuel costs. While we have the natural resources to be energy independent—and help power the world—regulatory burdens prevent getting these resources to market. Inflation is not going away soon. Lawmakers need to first recognize inflation’s root causes—in particular, government spending—to bring about sound solutions that help working families.