Chronic Inflation: Enough to Snatch Congress Majority Away from Democrats?

The single biggest threat that Biden faces today is inflation, which has the potential to snatch the Senate and House majority from Democrats in next year’s mid-term elections.

Even though Democrats have got temporary relief by passing the infrastructure bill recently, higher inflation can be their nightmare if it remains untackled.

This is the most important reason to consider for the lower-class and middle-class voters in global elections.

The reports suggest that inflation in America has hit the highest level since 1990, which portrays the bleak picture of the economy these days.

What are the reasons for persisting inflation in the country, and how can it pose a threat to Democrats in next year’s election? Let’s see.

Supply chain backlog has impacted the overall circle of the global economy and is posing threat to rising inflation as well as demands continue to surge amid declining supply.
Supply chain backlog has impacted the overall circle of the global economy and is posing threat to rising inflation as well as demands continue to surge amid declining supply.

Supply Chain Crisis: The Biggest Threat to the Economy Right Now

The backlog at ports all over the US is far from over, and the administration has yet to develop an effective plan.

Even with the dwindling supply, the demands of consumers are high, especially in the holiday season.

This triggers the supply and demand crisis, ultimately leading up to chronic inflation. 

According to the latest data, inflation increased by 6.2% last year, and if the situation goes unattended, this number could easily go into double digits during the holiday season.


Rising Job Resignations could Make Inflation Last into 2022

The US Labor Department recently issued a report that a record 4.4 million people left their jobs in September only.

This is the continuation of a dangerous trend, which primarily started before the pandemic but intensified after the coronavirus outbreak.

However, the worrying part is that these numbers are continuously increasing, and continuing with this trend, it will break all records until the end of the year.

In 2020, almost 34 million people resigned, while in 2021, through September, almost 36 million have quit their jobs.

So, while the data of the last three months has yet to come, the result can shock the administration.

Greater resignation is related to inflation in two ways. Firstly it increases inflation as the companies are forced to cut down their production because of the labor shortage.

According to experts, many companies have to replace all of their workers within a timeframe of one month, which is also impacting the overall efficiency of the economy.

Ultimately, lower production means lower supply and hence higher costs and inflation.

However, the aftermath of this great resignation crisis somehow reduces the overall impact of the crisis on inflation.

By leaving their jobs, the purchasing power of the people is reduced, which forces them not to buy too much. Hence, the demand reduces somewhat.

But in order to maintain an equilibrium, bringing people back to work is the only way out, as their presence in companies is not only beneficial for them financially but also for others who are dependent on the products they make.

Biden must tackle the inflation by making an inclusive strategey as the current crisis can easily de-seat many democrats in the midterm elections/

Chronic Inflation: Biden Must not Take the Issue Lightly

Contrary to the White House’s beliefs that the current wave of inflation is transitory, experts believe that it will get worse before coming back to normal.

This is surely an indicator toward the holiday season, where most Americans rush toward markets to spend their savings. With nothing to buy on the shelves and a lot of buyers, things will start moving to worse.

Nonetheless, many voters will surely remember the holiday seasons they had before voting in next year’s elections, which is a downside for the general public.

The most concerning thing for the Biden administration is that once inflation surfaces, controlling it is a job that takes time. 

Now the White House is considering nominating Jerome Powell to the Chair of the US Federal Reserves, a Donald Trump era employee who served under him in the same capacity.

With his arrival comes increasing interest rates as well. Higher interest rates are considered an immediate way of controlling inflation as the amount of money in people’s pockets gets reduced.

However, this can be considered as an unpopular approach which could also give Biden a popularity hit.


Final Thoughts

These inflation numbers pose a threat to Biden’s Build Back Better agenda as well. The only reason why Joe Manchin is hesitant to vote for the social spending plan is his estimate that the passage of the bill will skyrocket inflation.

This is what he said after the Democrats’ loss in Virginia as well; that voters in Virginia and West Virginia are likely to look at these indicators while voting, so the social spending bill will only make the matter worse.

Ultimately, the rising inflation means no vote of Joe Manchin for the social spending bill, and hence another blow to Biden’s agenda.

While Republicans walk the sloppy road of finding good candidates for their Senate races, Democrats must try to come up with actionable measures as soon as possible to avert these crises.

What’s your Reaction?