Wednesday, Feb. 01, 2023|
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Elections are rarely about only one issue, but there’s no question that economic worries motivated voters this year. Polls, both before the election and exit polling, showed that inflation was their No. 1 concern.
That’s not surprising. All around the country we see the detritus of inflation’s destruction. The average family feels $7,400 poorer today than when Biden took office, largely because prices have jumped almost 14 percent.
The next Congress needs to slay the beast of inflation. While that is a simple, straightforward task, it is not for the weak-willed. Once let out of Pandora’s box, inflation does not go quietly.
The winning formula has three parts: Spend less, drill more and liberate capital. These are the sword, shield and steed Congress must take into battle.
The primary weapon of the next Congress is their power of the purse. Today’s inflation is ultimately driven by excessive government spending. Cutting that spending will reduce inflation.
When lawmakers are spending into oblivion, interest rates on government debt would normally become prohibitively expensive, but the Federal Reserve has a political incentive to provide Congress with money created out of nothing. That provides a spendthrift Congress with its needed revenue through the hidden tax of inflation but debauches the currency. However, if Congress is not running massive deficits, this inflationary incentive at the Fed goes away. They must take their sword to the budget and enact the painful but necessary cuts that will cut off the beast of inflation from its lifeblood.
Next, the new Congress must do everything in its power to end the war on reliable American energy and protect our domestic producers of coal, oil and natural gas. The attacks from the Biden administration and the outgoing Congress have reduced output from our domestic producers and driven up prices. Congress must remove onerous taxes, like the ones imposed in the Inflation Reduction Act, while also removing subsidies for unreliable and expensive “green” energy.
The next Congress should use its shield to protect these American energy sources, not out of favoritism, but because doing so will bring down costs for Americans. Coal, oil and natural gas are reliable and inexpensive energy sources and are far cleaner than in years past. Because energy affects everything we do and everything we buy, reducing energy prices reduces prices throughout the economy.
Being not just energy independent but energy dominant is also a security issue, something of which the world has been painfully reminded since the war in Eastern Europe. Americans should not be in hock to Saudi Arabia for stability in either energy prices or geopolitics.
Lastly, the incoming Congress must remove those artificial disincentives that are holding back capital investment. More investment means more economic growth, and a larger economy relative to the same amount of money means lower prices.
The steed to ride into battle is one of deregulating, lowering taxes and counter-thrusting the Biden administration’s executive regulatory overreach. The executive branch has repeatedly spent money that Congress did not authorize, such as the student loan handout, or taken full advantage of whenever Congress has abdicated its duties. It is time Congress reassumed those responsibilities.
In many instances, the Biden administration has used its overreach to disincentivize capital investment. The new Congress needs to oppose financial regulations that are imposed based on ideology instead of sound banking and investing. This would include measures like penalizing commercial and investment banks for having accounts for or investing in fossil fuels. Congress should also repeal the misguided tax on corporate book income in the IRA.
Conservatives must govern on offense if they are to maintain the trust of those who sent them to Washington. This means taking a strong, uncompromising stance on key issues like inflation. There is no ground to concede here – either we’re a nation of sound money, or we aren’t. We either have strong banking and energy sectors, or we don’t.
The Biden’s administration’s misguided policies in these areas have been destroying people’s lives and livelihoods. Conservatives in Congress must hold the line on these issues, both for their own sakes come reelection, but more importantly for the sake of their electorates and the fate of America.
We can’t just keep spending our way to the poorhouse. The inflation dragon can’t be tamed. It has to be killed. Let’s hope Congress is willing to do what it takes.
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