6.8% inflation surge: Is COVID to blame?


Fact Box

  • According to the US Bureau of Labor Statistics, inflation hit a “39-year high” since 1982 in November 2021 with the consumer price index reaching 6.8%, which is up from 6.2% in October. 
  • In November, prices for groceries rose 6.4%: 13.9% for beef, 16.8% for pork, 8.4% for chicken, with gas prices jumping 58.1%. 
  • Multiple stimulus checks were released by both President Trump and President Biden during the duration of the pandemic’s worst months; checks ranging from $600 to $1,400 per person. 
  • The first case of COVID-19 was reported on December 31, 2019, in Wuhan, China. The US declared a “nationwide emergency” on March 13, 2020.

Curtice (No)

Biden’s administration is looking to explain away the inflation surging under their watch in such a short time. However, a hard look at this administration's policies and wasteful spending clearly shows how it is contributing to this increasing inflation spike.   

COVID is not to blame, as claimed. However, the government's handling of COVID has certainly played a factor. While the government's response to COVID started under Trump, he resisted instituting a national shutdown, saying America is not 'built to be shut down.' Turns out, shutting down economies for months is a terribly destructive idea that harmed many more lives than saved. After many people were forced out of jobs by business shutdowns, the government paid them not to work through unprecedented financial benefits.

It is less COVID and more the government's response and the increasing 'regulatory uncertainty' about financial policies that severely affect the supply chain and the economy's overall health. Fewer goods available to meet demand equals higher prices.  

The US became a net oil exporter under Trump. That quickly changed under Biden and the US is now more beholden to OPEC (petroleum exporting) countries and the oil prices they set. This has resulted in an increase in gas prices, negatively affecting all Americans. These prices have skyrocketed just over the past year alone. 

Additionally, congressional Democrats have pushed through three huge spending bills this year, almost all financed with debt. Add to that the Federal Reserve's policy of printing money as fast as the printing presses can print it, calling it 'quantitative easing.' 

As economists have and continue to predict, these Biden-era policies inevitably result in inflation. The administration can try to blame COVID for inflation, yet evidence shows they only have themselves to blame.

Hanna (Yes)

When we started to close offices, entertainment, and other non-essential businesses to the public last year, much of the economy suffered, with businesses shutting down and citizens losing their jobs. The supply chain was at a halt, and government spending during the end of the Trump era went towards keeping the economy afloat during a crisis. 

Once restrictions were lifted during the Biden era and citizens went back to work, the high demand from the previous deflation of 2020 swung erratically from one end of the spectrum to the other. The correlation is not coincidental. There is no evidence we would be still be facing this spike in inflation if COVID did not happen; In fact, previous events say otherwise. The years following World War II experienced huge episodes of post-war inflation due to the removal of supply and price constraints and a backup of demand, similar to what we experienced during COVID. Same with the Korean War, oil shocks, and Iraqi's invasion of Kuwait. 

The US isn't the only country experiencing an inflation spike either, so saying this is merely all a problem with a current or former government wouldn't be entirely true. Most of the world is encountering the same inflation spike to varying degrees, with only a handful of countries actually experiencing any type of deflation. 

Experts say this large spike is likely to dissipate as we catch up with supply and recover from the pandemic. There is no reason to panic or stockpile resources, as stockpiling is expected to do more harm than good for the economy right now.

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