“Apologetics” means the organized justification of something, typically religious doctrine. An “apologia” is a formal written defense. At Vox.com Andrew Prokop offers what appears to be an apologia for the Biden Administration’s signature bill, the American Rescue Plan. He confesses that it did, indeed, increase inflation beyond what it otherwise would have been:
Countries around the world are struggling with inflation due to pandemic disruptions, but the Biden stimulus made the US’s inflation problem more severe, to at least some extent. “I think we can say with certainty that we would have less inflation and fewer problems that we need to solve right now if the American Rescue Plan had been optimally sized,†said Wendy Edelberg, a senior fellow in economic studies at the Brookings Institution.
Maybe I’m missing something but to my eye a shortened version of his argument would be:
- Inflation in the U. S. is higher than in any other developed economy.
- Core inflation in the U. S. is higher than in any other developed economy.
- Not all of the effects of the ARP were bad: GDP and employment have recovered well.
- The Biden Administration had good intentions.
but he offers no alternative explanation for why inflation if worse here than in other OECD countries. Blaming supply chain disruption, as the Administration does, is facile for reasons I make clear later in this post.
I also wanted to call out this passage:
Giving money to people who don’t need it isn’t necessarily a bad thing in and of itself.
I wish he had expanded on that sentence a little more since I disagree with it categorically. I think it reflects a view of government completely different from mine. In what view of economy and government is “giving money to people who don’t need it” a good thing?
I also think there is a fact he omits completely. The U. S. has a higher trade deficit as a percentage of GDP than any other developed economy. Not just higher than the China, the UK, Germany, and France. Higher than Russia. Higher than Mexico. Higher than Canada, New Zealand, or Australia. We’re not in the same fix as economic basket cases like Somalia but we’re about in the same situation as the poor countries of Africa and South America.
That has serious implications. We are more vulnerable to global supply chain disruptions than any other developed economy. Consequently, increasing demand as the ARP demonstrably did inherently raises prices more than it will in any other developed economy.
It is said that the Roman orator Cato the Censor concluded all his speeches with Carthago delenda est (Carthage must be destroyed). Maybe I should start ending all of my posts with Increase. Domestic. Production.
