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As concerns grow over President Joe Biden’s cognitive decline, Democrats and their appointees are hedging their bets in a variety of ways. That means not only considering whether (and with whom) to replace Biden, but also what to do if Trump wins.
In the latter case, they are already trying to hold former President Donald Trump accountable for Biden’s reckless economic policies.
Prominent economists recently published a letter saying that if Trump wins in November, what they call an “inflation bomb” would likely ensue. The group includes economists who said Biden’s “Build Back Better” plan in 2021 (which became the Inflation Reduction Act) would not be inflationary. One of them is the husband of Treasury Secretary Janet Yellen, who has said inflation is not a problem and will be “temporary.”
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Now Democratic mouthpieces are warning of a future surge in inflation if Trump becomes president again. Why? Because they know an economic disaster is looming and they want to blame Trump, saying “I told you so.”
Already, 16 prominent economists have sought to pin the blame for economic downturn on former President Donald Trump if he wins. (Eric Thayer, The Washington Post via Getty Images)
The reality is that the current administration has used many tricks to suppress inflation and false growth. They’ve run out of tricks and are now handing it over to Trump to make him economically responsible, so to speak.
Tactics such as releasing oil from the strategic oil reserve (and keeping the strategic petroleum reserve at its lowest level in decades) have been used to artificially suppress energy prices (and therefore the prices of other products and services), but such tactics cannot be pulled off repeatedly.
Moreover, the Congressional Budget Office recently raised its budget deficit forecast for this fiscal year to $1.9 trillion, a massive deficit as a percentage of GDP that is roughly double the historical average, raising concerns about the debt and its impact on the U.S. finances.
A recent Wall Street Journal article, “Is Debt Sinking the American Empire?” points to a CBO projection that “the debt burden will reduce income growth by 12 percentage points over the next 30 years as debt repayment crowds out other investments.”
Then there is the problem of financing the huge U.S. debt burden, which includes not only the ongoing deficit but also short-term debt issued in past years that needs to be refinanced.
Presumably, given the supply of debt at a price that would keep the Treasury market functioning, and the number of interested borrowers, the Fed would have to find a way to liquidate the debt, either directly or indirectly, through one of its cleverly named programs, and in so doing would likely cause continued and sustained inflation, or even increased inflation.
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Other current initiatives by the Biden administration, including the push for “green” energy, are also dragging down the economy.
Other warning signs are flashing red: Given that this year’s huge budget deficit only pushed GDP growth to 1.4% in the first quarter of the year, it’s clear that underlying economic momentum is slowing and even the token government stimulus is not enough to hide that reality.
Add to this the fact that many consumers are dipping into savings and debt to cover living expenses, and you have a very real economic crisis on the horizon, many of which are based on policies enacted under the Biden administration.
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With the US’s fiscal foundations in jeopardy, there is little that President Trump can do to improve the situation, and his options will likely be further limited as he navigates a precarious fiscal situation.
Still, if Trump wins, Democrats will do everything they can to pin the blame on him. That’s why they’re preparing that narrative today. If Biden (or whoever the Democratic nominee is) wins, they’ll continue to mislead the American people about the economy. But if Trump wins, they’ll say “I told you so,” because they know what’s coming, and it’s never good.
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