While Washington works overtime to churn out a massive $3.5 trillion social spending package with tax increases during a pandemic with inflation running at or above 5%, Americans prefer cutting government spending to control inflation.
Americans are also unanimous that current inflation is not transitory.
These are the key findings from an I&I/TIPP poll of 1,300 Americans completed in early September.
The poll asked if inflation is a long-term problem or a short-term problem that will soon disappear. The charts below show the results.
Regardless of party affiliation or ideology, Americans agree that inflation is a long-term issue.
The U.S. economy is in a tough spot.
Businesses are struggling to stay afloat, and the last thing they want to see is a tax increase. Inflation is running rampant. Personal Consumption Expenditure (PCE) stands at 4.2 percent, with PCE excluding food and energy at 3.6 percent. Inflation acts as a form of indirect tax on American households.
Federal Reserve Chairman Jerome Powell told lawmakers on Thursday that the Fed still expects the high inflation to end, but it is difficult to predict when that will happen. "We have an expectation that high inflation will abate because we think the factors that are causing it are temporary and tied to the pandemic and the reopening of the economy," Powell said. "These aren't things that we can control."
Last week, the Fed announced that half of the 18 policymakers see a 2022 rate hike, vs. 7 at the prior meeting in June. Several members forecast greater inflation next year than they did in June, and nearly all foresee further rate hikes in 2023.
Chairman Powell said last week the Fed was ready to start winding down its massive stimulus programs in November with asset purchases falling to zero by mid-2022, and the Fed's rate-setting committee said it could raise rates next year if inflation stays higher than expected.
Washington is deliberating on a $1.5 trillion infrastructure package and a $3.5 trillion social spending package.
The pandemic's trajectory is unknown. While monthly deaths had steadily decreased from 97,395 in January 2021 to 8,699 in July 2021, it suddenly spiked in August of this year with 26,000 deaths due to the Delta variant.
How To Tame Inflation?
The poll presented six strategies and asked respondents to pick strategies they favor. Each respondent could select multiple methods to control inflation. Here's the tally of the responses.
- 51% cut government spending
- 32% impose price controls
- 30% reverse recent regulations, especially on energy companies
- 29% reduce tax rates on businesses
- 26% Federal Reserve should print less money
- 7% Nothing can be done. Let it run its course
- 14% Not sure
Cutting government spending (51 percent) is the only strategy that has majority support.
While most Republicans (65%) and independents (56%) favor cutting government spending, only one-third of Democrats (36%) agree. By ideology, conservatives (68%) and moderates (50%) favor cutting government spending. Only 30% of liberals favor it.
Imposing price controls is the most popular method for liberals, favored by 43%. Republicans (45%) favor reversing recent regulations, especially on energy companies.
The data conveys a strong message to Washington. Now is not the time to engage in social engineering.
Washington is simply out of touch to even contemplate, let alone pass, such massive spending bills.
Businesses and families in the country are hurting and afraid of inflation, and they believe that big government spending is unwise.
Be warned: politicians who ignore will pay dearly for their actions in the midterm elections next year.
China continues to deploy a large number of troops and armaments in India-China border areas.
India on Thursday hit out at China for attempting to blame it for the eastern Ladakh standoff, asserting that the "provocative" behavior and "unilateral" attempts by the Chinese military to alter the status quo along the Line of Actual Control (LAC).
India's reaction came in response to China's fresh allegation that the "root cause" of the tensions between the two countries was New Delhi following a "forward policy" and "illegally" encroaching Chinese territory.
Replying to a media query on China's allegations, Mr. Bagchi said India had already made its position clear on the matter a few days back and rejected such statements that have "no basis in facts."
Due to the import suspension by Beijing, the export of Taiwan pineapples to other countries other than China has grown by 560 percent between January and August
Regarding the mainland's ban of the two kinds of apples in an apparent attempt to squeeze Taiwan's economy, deputy agriculture minister Chen Junne-jih told reporters that the island would take the matter to the sanitary and phytosanitary committee of the WTO in October if China refuses to negotiate.
Chen said Taiwan has been asking China to provide scientific evidence of discovering pests, adding the government still hopes to solve the issue through negotiations.
The move came after China said it was suspending imports of custard apples and wax apples from Taiwan from Sept. 20, claiming that mealybugs have been found in shipments of those fruits on multiple occasions this year, without providing further details
Russia's Foreign Ministry reports massive troop deployments and has called on both sides to de-escalate.
On Thursday, longtime Tajik ruler Rakhmon presided over a military parade near the border. The show of force followed a similar parade near another section of the border Wednesday.
Russia, which maintains a military base in Tajikistan, is concerned that militants and drug smugglers could take advantage of the unstable situation created by the recent fall of the government in Kabul. Earlier this year, Russia said that the Taliban controlled roughly two-thirds of Afghanistan's border with Tajikistan.
On Wednesday, U.S. Defense Secretary Lloyd Austin voiced concern for U.S.-trained Afghan pilots and other military personnel who fled into Tajikistan to escape the advancing Islamist hard-line Taliban. The pilots, said Austin, flew dozens of military aircraft into Tajikistan and Uzbekistan.
Jessica Rosenworcel, acting chair of the Federal Communications Commission, thinks she's found a new way to stop the illegal, automated spam calls originating from overseas.
She's proposing to close a loophole in FCC regulations to require "gateway providers" to stop robocalls before they get to your phone. The agency adopted the proposal, called the Targeting Gateway Providers to Combat Illegal Robocalls, during its monthly meeting on Tuesday.
The proposed regulation would put additional requirements on US-based gateway providers that pass through voice traffic to other networks in the US. These gateway providers, smaller, low-profile companies that handoff calls from network to network, are often used by foreign scammers to disguise phone calls entering the US.
The FCC set a deadline of June 30, 2021, for every major voice provider in the US to implement a technology called Stir/Shaken, which verifies the number that pops up on caller ID is legitimate.
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