Is The Fire of Inflation Being Extinguished?
As Ronald Reagan once said, “The country is not suffering from high inflation because people are living too well, but because the government is living too well.”
Oct. 1980 was the time in question. In Cleveland, Ohio, former California governor Ronald Reagan and incumbent Democratic President Jimmy Carter squared off. The yearly rate of inflation was 12.6 percent, although it had lately reached a high of 14.6 percent. Carter had devoted a significant portion of the election season to criticizing the Federal Reserve, OPEC, and even the purportedly wasteful habits of American consumers for the country's high inflation rate.
Carter believed that Reagan's proposed tax cuts would worsen inflation. According to him, they were "one of the most highly inflationary ideas ever presented to the American people."
When asked why it was inflationary to allow individuals to keep their money and spend it wherever they pleased, Reagan's retort was devastating: "Why is it not inflationary to allow them to take their money and spend it however they please?"
Reagan delivered one of those State of the Union addresses to joint sessions of Congress soon after taking office, which is customary for freshly elected presidents.
“We know now that inflation results from all that deficit spending,” Reagan said.
Higher levels of spending and the accompanying borrowing run the risk of starting an inflation-deficit cycle that will never end. Higher interest rates on federal debt are one of the factors contributing to increased spending. Government interest spending has increased by $136 billion, or 23%. These debt payments provide income for Treasury bond holders, which drives up inflation. Because of the rising inflation, the Fed must raise interest rates further or maintain them higher for longer, which means debt service costs will continue to rise. - Breitbart
“Core Services” Inflation Jumps to 2nd Worst since 1985
The price of services is rising once more. According to data released today by the Bureau of Economic Analysis, the "core services" PCE price index increased year over year to 5.4%, the second-worst level since 1985, tied with January 2023. The worst month had been February.
The Fed still has a lot of work to do. Powell has been concerned about core service inflation for a year, and today he received the outcome he had anticipated: an acceleration of core service inflation, particularly in the hot "non-housing services":
Year-over-year, the “core” PCE price index, the inflation measure favored by the Fed, accelerated to 4.2%, from 4.1% in June, over double the Fed’s target of 2%, and going in the wrong direction. - Wolf Richter
Vast Majority of Americans Say Economy Is Bad And Getting Worse
Sixty-three percent of American registered voters say the economy’s strength is “not so good” or “poor.” Just 32 percent say the economy is “good” and only five percent say the economy is “excellent.”
The housing market elicits an overwhelmingly negative response. Eighty-six percent say the cost of housing has moved in the wrong direction, versus just eight percent who say it has moved in the right direction.
The economy is weighing heavily on the minds of many Americans. Thirty-eight percent of Americans say the economy is the most important issue in the 2024 Presidential election, up from 35 percent in April. Another 10 percent said inflation is the most important issue, up from seven percent in April. After the economy, the top issue is “immigration, at 23 percent. No other issue scores in the double-digits. - Brietbart
The War On American Energy
In a victory for environmental organizations, the Biden administration secretly repealed a Trump-era policy permitting businesses to transport LNG through rail.
The Pipeline and Hazardous Materials Safety Administration (PHMSA) of the Department of Transportation formally canceled the 2020 authorisation of LNG transportation in rail tank cars on Friday, just in time for the long weekend. The regulation will be in place until June 30, 2025, or until either a long-term regulation for LNG rail tank car transportation is put up and approved, which might take several months.
"The extended hold of the rule for transporting LNG by rail is disappointing," Railway Supply Institute President Patty Long said Friday. "Transporting LNG has a proven safety record, and with our country continuing to face rising energy prices, we should be incentivizing critical infrastructure that can provide additional capacity to the U.S."
