There's more to understanding recent inflation

During 2021 and 2022 the United States experienced rapid and painful inflation. Painful for all but the top ten percent on the economic ladder.

They saw their homes, boats and other assets substantially increase in value. The two years noted above were the first two years of Biden’s administration and he has received most of the blame for it.

There were two primary reasons for this rapid increase in prices. The first was supply chain interruptions caused by plant shutdowns because of Covid. Most critical were the computer chip shortages caused major manufactures in Taiwan and Japan. This shortage occurred at the same

time demand for computer chips was accelerating. Please note that rapid inflation was a worldwide problem, and the US made out better than most if not all other countries.

The good news here is that over the last the years, The United States has made and encouraged an enormous investment in domestic production of computer chips. We will begin to see production of these domestically manufactured chips. It takes time to build these complex manufacturing plants and get them up and running. This investment materialized during Biden’s term.

The second cause for inflation was/is the rapid growth of our federal deficit over the last seven years. Deficits are caused by lower tax revenue and increased expenses.

Both Biden and Trump spent excessive amounts in providing Covid relief. Other expenses were also increasing rapidly. But Trump also passed a significant reduction in income taxes, a large proportion of which benefitted the wealthy. A tax reduction during a time of rapidly increasing expenses was ill advised and contributed to rapid inflation. It usually takes a couple of years for a policy change to take effect, and the impact of the tax cut was felt during the first years of the Biden presidency.

In summary, rapid inflation was caused by Covid supply chain interruption, most importantly computer chip shortage. Biden should be given credit for investing in domestic production of these chips.

Significant increase of our budget deficit is the second. Both men bare responsibility here but, Trump more so because of income tax reduction.

An objective analysis would assign more responsibility for rapid inflation to Trump, but Biden has taken all the blame.

–Bob Ferrara, Longboat Key