Is Treasury official right only way to combat inflation is through global vaccination?
- On October 14, 2021, on ABC News, Deputy Treasury Secretary Wally Adeyamo stated the surge in inflation is part of an “economy in transition” coming out of the pandemic, and that the only way out is if “everyone in America and everyone around the world gets vaccinated.”
- The Biden administration released the $1.9 trillion American Rescue Plan January 20, 2021 to provide direct relief to families in the form of the vaccine program, $1,400 stimulus checks, and support for small businesses.
- Since November 2020, inflation has been rising due to the reopening of the economy. From November 2010, prices at the producer level (PPI) rose 7.7% in July 2021, while consumer prices (CPI) rose 5.3%.
- Almost half of the global population (47.6%) has received at least one dose of the COVID-19 vaccine. In the United States, 189.9 million people have been vaccinated (57%) and 66% have received one dose.
While it may be tempting to think the United States is insulated from the ongoing pandemic in other parts of the world by our relatively good vaccination numbers, it is crucial to recognize the global nature of our economy. The ability of businesses to remain open with normal functionality at home won't make much difference if there are major disruptions in supply chains, such as those we are currently seeing. Allowing the pandemic to spread unchecked in other nations could result in factory shutdowns throughout Asia, problems with oil coming from the Middle East, pharmaceuticals from India, and many other currently unforeseen disruptions. Further, rampant viral spread abroad may mean a need to close ports or add extra quarantine measures. All of these factors could squeeze the supply of goods at home, putting pressure on prices. A strong and global approach to vaccination can ensure that this situation stays under control.
Each time a virus replicates, it has the chance to mutate. With billions of unvaccinated people worldwide, the potential for more variants to emerge is highly likely. If we were to see a vaccine-resistant variant or a more lethal version arise, all of the pain and suffering caused during the past year would be for nothing. A more deadly variant could cause massive disruptions and increase inflation above and beyond what we're already seeing. The messaging coming from the Treasury Department that these disastrous situations can be avoided by working toward targets of more vaccination throughout the developing world is spot on.
Deputy Treasury Secretary Wally Adeyemo said over the weekend the only way to get inflation under control is to get everyone in America and around the world vaccinated. This is just another excuse from the Biden administration to explain rising inflation and further deflect blame from their poor, authoritarian policies. Government spending, something Biden and the Democrats show no signs of slowing down, is almost always a primary driver of inflation.
While there have been supply chain disruptions, they have been primarily caused not by COVID but by many countries worldwide, including the United States, implementing draconian measures in response to the pandemic. When those in charge shut down the worldwide economy, major disruptions in the supply chain will arise as a sub-set of that. Until policy-makers start loosening the lockdown noose around their economy and constituents, problems with meeting the demand of people staying home spending government checks on items that need to be supplied will inevitably arise.
This is a problem wholly created by governments worldwide and will not be resolved through global vaccination mandates. As we have seen, even those who are fully vaccinated are not immune from contracting or spreading COVID. Colin Powell is just the latest high-profile example. And the Arizona Cardinals, an NFL team of 100% fully vaccinated players, coaches and staff, had their head coach, as well as other coaches, players, and their general manager, test positive for COVID last week, forcing them to miss the team's game in Cleveland. It is clear that COVID will not go away merely because people are vaccinated. Nor will inflation.