Biden’s Shrinkflation Accusations
TL/DR –
President Joe Biden attributed the increased cost of Super Bowl parties to corporate greed and “shrinkflation,” a practice where companies reduce the size or quantity of their products while keeping the price the same. However, the author criticizes this stance, attributing the rise in living costs to the fiscal irresponsibility of the Biden administration and its excessive spending during the pandemic. The article cites a report by William Beach, former head of the Bureau of Labor Statistics, arguing that deficit spending led to a substantial increase in lending and a surge in the money supply, triggering an inflation crisis.
Biden vs Corporations on Super Bowl Prices and Shrinkflation
In the light of Super Bowl, President Joe Biden raised concerns over the escalating party expenses, attributing it to corporate greed and “shrinkflation”. Through a social media video, he highlighted the trend of companies selling reduced quantity products at the same price and called on major consumer brands to tackle this issue.
Shrinkflation and Inflation: The Connection
Biden links shrinkflation to the snack and sports-drink industries that maintain product price while lessening size or quantity. This practice effectively raises the actual price, a byproduct of the ongoing inflation that began in 2021. The president’s focus on shrinkflation is eye-catching because, despite a decrease in inflation, food prices have jumped by 20% since February 2021, with chicken and bread experiencing a 25% hike, causing public discontent despite economic growth and wage increases.
Government Spending and Inflation
Biden’s criticism against companies diverts attention from the government’s expenditure policies during the COVID-19 pandemic that led to inflation. The Economic Policy Innovation Center recently published a brief titled “Is Inflation the Result of Excessive Deficit Spending?”, written by former Bureau of Labor Statistics head William Beach, examining the impact of these policies on inflation.
From 2020 to 2023, federal deficits reached $8.8 trillion, marking the largest peacetime deficits in US history. This spending, much of which occurred post-pandemic crisis during recovery, led to a 25.4% increase in bank assets between 2020 and 2021, driving a substantial rise in lending. As a result, the money supply grew by $5.4 trillion between March 2020 and April 2022, which equated to a third of the US GDP.
The True Culprit Behind Inflation
Beach’s report stresses that other inflation explanations like supply-chain disruptions and price gouging are not credible. It’s the government’s excessive spending, which increased the economy’s purchasing power and triggered an inflation crisis, that’s to blame, not corporate greed. The report also underscores that the government has the ability to halt inflation through appropriate spending cuts.
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