LARRY KUDLOW: Democrats are trying to spend and borrow to buy the election
You would think that with consumer prices up nearly 20% since Joe Biden took office and with a Consumer Price Index snapback in recent months to nearly 5% annually — way above the Fed's 2% target — that Joe Biden, who's in a heap of trouble on the inflation issue to begin with, would want to do something to curb inflation and maybe somehow salvage the election.
If you thought that, you would be totally wrong. Biden has no such intention. By the way, Biden is the guy who just told an interviewer that he inherited a 9% inflation rate.
Actually, Donald Trump handed over a 1.4% inflation rate, which Joe Biden subsequently ran up to 9% with a massive federal spending and borrowing spree.
Speaking of massive federal and borrowing, a bunch of recent articles have just come out showing that Biden would just love to spend the up to $1.6 trillion of money that Congress has approved, but the federal bureaucracy has not yet spent out.
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The unspent money covers clean energy, electric vehicles, various climate change giveaways, subsidies and tax credits, along with semiconductor manufacturing and who knows what.
The misnamed Inflation Reduction Act is a big culprit in this story. It is still spending out, but even going back to March 2021, which some call the "original sin" of inflation, there's still COVID money spending out!
Really, you can't make this stuff up, and actually, it would be a monumental task requiring some of the greatest minds alive today to devise ways to spend $1.6 trillion of federal money in the next six months.
Judging from Joe Biden's overall performance, he is not in possession of the greatest minds today, but they are all trying their hardest to spend and borrow and somehow buy the election. There's even another $350 billion remaining under the guise of COVID-19 relief. This is for state and local governments. It's called the Coronavirus State and Local Fiscal Recovery Fund.
It's bad enough that this thing is still kicking around as a holdover from the misbegotten American Rescue Place of March 2021, but this money is supposed to be spent before the end of this year. Now, the Biden Treasury has decided that if the states and localities plan to spend it after the statutory deadline, they can go on ahead and spend it.
Is this a great country or what? Now, Republicans will have opportunities to stop this avalanche of inflationary spending, but they're going to have to get to work in the next 90 days. Meanwhile, the potential inflationary consequences of these dreadful policies could well lead to much higher interest rates and, of course, much greater deficits and borrowing and inflation, but Joe Biden does not care one whit about inflation.
He thinks he's going to win the election this way. Well, Joe — remember this: FDR had four terms. You may only have one.
This article is adapted from Larry Kudlow’s opening commentary on the May 9, 2024, edition of "Kudlow."