Inflation is on everyone's mind these days. And for those listening to right-wing media, it's all President Biden's fault. But is it really?
Let's look historically at the average retail price of a gallon of regular gas. Prior to the pandemic in 2019, gas prices averaged roughly $2.65. When the pandemic hit and economies globally shut down, gas prices plummeted to $1.74 by April 2020 (a 34% decline; the unemployment rate rose to nearly 15% from 3.5%), with gas prices settling at $2.25 by August 2020. This was the sharpest economic contraction on record.
By the way, the national average for a gallon of regular gas in late January 2021, when Trump left office, was at $2.39 per gallon.
When economies globally began to open up as concerns over the pandemic waned, the demand for gas increased rapidly. Gas prices initially spiked to $3.40 by October 2021, settling at $3.15 by December 2021.
Then, the Russian invasion of Ukraine began Feb. 24, 2022. Since Europe is heavily dependent on Russia for its oil and natural gas (over a quarter of EU's oil was imported from Russia), and the NATO nations heavily sanctioned Russian oil imports in retaliation for the invasion, gas prices spiked to $4.35 in February, and again to $5.01 by June 2022 as additional sanctions were added.
In response to the precipitous rise in gas prices, President Biden took the unprecedented step on March 31 of releasing 1 million barrels of oil daily from the Strategic Petroleum Reserve for a 6-month period to offset rising oil prices. As a result, gas prices dropped to $3.80 by mid-August (a 24% decline).
What have President Biden and the Democrats done recently?
Both the Senate and House passed a sweeping tax, health and climate bill dubbed the Inflation Reduction Act (IRA). The Congressional Budget Office (CBO) estimates that the IRA will reduce the deficit by over $102 billion over the next 10 years.
In addition, the IRA will empower Medicare to negotiate prices on 100 drugs; it will impose a 15% corporate alternative minimum tax on rich corporations; and it includes a record $369 billion in spending on climate and energy policies, projected to slash the country’s carbon emissions by roughly 40% by 2030.