Quote Originally Posted by thirdperson:
Inflation is driven by economic recovery, supply problems in markets and fiscal or monetary policies. Federal reserve is mostly responsible for fighting inflation. Not congress or white house that can only do little. Presidents can temporarily increase supply by releasing some oil from strategic reserves. Republican proposal to increase domestic oil production is unlikely to reduce inflation in the short term because increasing production usually require years of preparation. However their plan to cut taxes for the rich could worsen inflation and government deficits.
All factual. Thank you Thirdperson!
Good question, Midnight1.
But we must include at least these 4 key points, of which the USA has no direct control:
one, is contributing hugely to drive up inflation is the February 2022 war started by Russia, driving up worldwide oil pricing, including here,
two, is the September 2022 decision by OPEC to cut production which reduces supply and keeps oil prices much higher around the world, not just for autos and aircraft fueling but delivery trucking that brings almost everything we use daily,
three, climate related issues (like record drought in our west and flooding around the globe reducing supply) and record heatwaves increasing energy demands, plus disasters causing increasing costs for repair and reconstruction and insurance,
four, is all these issues are affecting the entire planet, not just USA!
In our arrogant USA bubble, it's easy for the ignorant nationalists to wrongly perceive inflation is only affecting USA and therefore our current government must be to blame. Knowing that this worldwide inflation is caused by and driven by worldwide factors (both directly and indirectly) is key to understanding.
One of the very few tools the government has it's disposal FOR IMMEDIATE RELIEF, at least to some degree, is release of emergency oil reserves to increase supply. It helps, but obviously only a short term aid. President has done this. Twice.
But as you say, other more meaningful solutions to inflation (and remember this is caused by worldwide factors mostly outside our borders) will take considerable time to improve down to a level where US citizens won't be whining.
The fed, which operates INDEPENDENTLY from the White House and Congress, as you correctly noted, is mostly accountable for managing USA inflation, although that too is not a perfect solution as there are pros and cons to anything they do. Even so as long as worldwide oil prices remain high then inflation around the world including here will remain high until the day we are weened off oil or gas for the bulk of our energy needs - which is far off in the future.
There may be some things that could be done in theory to help US citizens and businesses but that would require republicans to vote for it, which they will refuse to do absolutely until after they have the White House again. At that time the Democrats will block whatever the republicans want to pass.