Joe Biden has brought us Middle Eastern war, an open border, an energy crisis, and inflation in four months. We thought that would take him at least six months. Ben Carson tells us about inflation and what it will do to our wallets.

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Carson: “America’s fiscal house is not in order. The government spends trillions more than it takes in every year. For decades, our politicians have been more concerned with making speeches and raiding the treasury than sound economics and fiscal responsibility. In roughly the last decade, the level of federal debt held by the public increased more than 400% – rising from $5 trillion in 2008 to nearly $22 trillion by the end of 2020. Sadly, there are few to no political incentives for our politicians to act responsibly. But there is no free lunch, and the reckoning for our country’s fiscal profligacy is rapidly approaching in the form of inflation.

“Inflation, or increases in general price levels of goods and services consumed across the economy, results when there is an increase in money available to spend, but not a corresponding increase in goods and services to spend it on. As Milton Friedman famously observed, ‘Inflation is always and everywhere a monetary phenomenon.’

“Recently, there has been a substantial spike in federal spending, exceeding $8.5 trillion (that’s eight-and-a-half million million, or $8,500,000,000,000) each of the past four quarters, and twice exceeding $10 trillion in a quarter. Congress decided that this spending was necessary to stave off the ill effects of the pandemic. It may be possible to create the illusion that there is a ‘free lunch’– avoiding at least the pangs of the most nebulous side effects – in the short run.  But, in the long run there is an inevitable adjustment to individual decision-making based on changed economic circumstances.

“Further, politicians can benefit from inflation (notwithstanding the fact that Federal Reserve Chairman, Jerome Powell, has been openly campaigning that the central bank’s priority is to stimulate inflation), given preferences to use deficit spending in the short run, though this solution exacerbates questions of inter-generational fairness, such as why should tomorrow’s taxpayers fund today’s consumption. These issues should not be ignored. Today’s borrowing will saddle future generations with substantial debt, and negatively impact their standard of living…And once inflation starts, it is hard to predict when it will end.  Where inflation is spurred or maintained by low interest rates, some can benefit, and those people will want it to continue. If inflation goes down, government borrowing costs may rise. Equity prices increase with inflation, so stock owners would see their wealth erode if inflation were to lower substantially.

“A wise man once said ‘The first lesson of economics is scarcity. The first lesson of politics is to disregard the first lesson of economics.’ That is more true today than ever. Hopefully, those in Washington will realize the error of their ways and return to fiscal discipline before the monster of inflation becomes too large to tame, and we are left holding the tail of the proverbial tiger.”