Bill Ketter: The inflationary effect of elections | Opinion

Bill Ketter

The moment of truth is near.

The first voting states initiated the electoral process to determine control of Congress, state legislatures, and several governorates in a divided America. Local offices are also affected.

The suspense won’t end until those votes — along with mail-in, mail-in and in-person ballots — are counted on Election Day, Nov. 8.

Trapped in cultural crossfire on abortion, borders, crime, schools and democracy itself, voters see the economy and inflation as the main problem.

Gallup and other public opinion polls show the pain average Americans are feeling because of higher prices for just about everything. The cost of food, gas and electricity tops the list.

“The economy is the basic issue in most national, midterm or presidential elections,” Gallup said. “This year is no exception.”

What seems unusual this time, however, is the economic contradiction of inflation in an era of robust employment. Only 3.5% of the national working population is unemployed.

“Low confidence in the economy persists despite the fact that about seven in 10 American adults say now is a good time to find a good job – among the highest readings in Gallup history to ask this question,” the pollster’s survey revealed.

What the public thinks about the causes of inflation and which party is best suited to combat it is the crucial question with the election less than three weeks away.

Because Democrats control Congress and the White House, they are the primary target of blame, deserved or not.

Lost in the shadows is the devastating coronavirus pandemic that has ravaged the economy for more than two years. Fighting the health crisis meant spending billions of government dollars to keep the lights on for millions of working-class Americans and thousands of small businesses. City, town and state governments have also benefited from the loss of tax revenue.

The predictable happened once the recovery happened. Sudden demand for goods and services exceeded global supply – and prices quickly began to rise, causing inflation to peak in 40 years. Suddenly, the consequences of the pandemic have hammered the return to normal.

Enter the Federal Reserve, the independent US central bank responsible for controlling inflation to maintain a healthy economy. It tries to do this by regulating the interest rates that banks charge each other for short-term loans – and that translates into what you pay in interest for home loans, credit cards, loans automobiles and other debts.

The Fed interest rate that affects all borrowing has fallen from a pandemic zero in March 2020 to 3.25% currently. The great hope is that supply will eventually exceed demand and prices will fall. Fear of recession looms like a storm front that might come.

The inflation politics of the blame game is easy. Understanding the intricacies of the economic problem and doing something about it is hard work.

Democrats are bragging about legislation passed by Congress in August – the renamed and scaled-back Inflation Reduction Act that received no Republican votes. Originally it was called the much more expensive Build Back Better Act, which even a few Democrats couldn’t support.

Mainly, the law allows Medicare to negotiate lower prices for prescription drugs and caps on out-of-pocket spending, extends federal health insurance subsidies for two years to those in need, and spends billions on investments. climatic. It also raises annual taxes for large corporations and multi-millionaires who earn $10 million to pay for new spending.

Republicans are less specific, but they remain on the key to cutting government spending and bureaucracy, cutting taxes, boosting economic investment, removing barriers to oil and gas exploration and production, with the aim energy self-sufficiency. Some Republicans have vowed to repeal the Inflation Reduction Act if they gain control of Congress.

Freedom of choice is a fundamental principle of democracy. The last day for voter preference is fast approaching.

Be sure to vote.

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