Speaker of the House Nancy Pelosi is good at two things: making money and slurring her speech. One stems from her abusing her political influence, but the other could easily be signs of an underlying drinking problem — or just cognitive decline.
Pelosi has pushed the idea that spending more money will make things cheaper. But many economists have some serious reservations about this stance.
Secretary of Transportation Pete Buttigieg made a recent statement on CNBC, stating, “I don’t think anything is permanent, but I think it’s clear that this is a serious economic issue. The president has been focused on prices and the effect on Americans for some time.”
In the past 6 months, there have been multiple trillion-dollar spending bills that have been put forward. Luckily for Americans, the Democrats didn’t get everything they wanted.
Buttigieg explained that “some of the investments we make help with inflation” and noted that supply chain issues are going to get better with the infrastructure bill.
But is his statement accurate? Instead of listening to politicians, take a look at the people who actually ship goods for a living. DHS reported, “Although the upcoming Chinese New Year may help ease some of the backlog, supply is likely to remain volatile through the remainder of the year, with conditions improving only in 2023.”
Joe Kernan, CNBC host, responded, “It sounds like she’s saying ‘we’re going to spend our way out of debt,’ and obviously no one that has a credit card bill thinks the answer is to spend more.”
When it comes to a credit card bill, interest matters. If you spend more money, your interest rate can be lowered; so, you’re paying less, right? Wrong. Overall, you’re still paying more and the term of the loan is generally spread out further; meaning that lower interest rate stacks up over the time of the loan. That shouldn’t make you feel better about spending more.
Still, Buttigieg is trying to convince the nation that this spending won’t affect everyday Americans, asserting that, “The government spending is doing the exact reverse, reducing the national debt. It is not inflationary.”
The problem is that the money will have to be paid back and the government will only find more things to spend money on. It’s a never-ending cycle that’s not slowing down anytime soon.