This Memorial Day weekend, AAA reports that there will be 37 million US travelers on the roads, but one thing they will notice, Gas prices at near record levels. The question, Why? Even with the global pandemic damaging the economic output of America and the ensuing shutdown of the economy, can we put the blame on COVID-19, or is there another contributing factor?
According to reports gas prices have hit on average $3.04 nationwide which is at the highest level since 2014. Last year the price for a gallon of gas was $1.98 on average. The Trump administration in the three years before the shutdown of the economy established America as an energy independent nation. With the opening of major oil fields, fracking and the addition of the Keystone Pipeline, America was a net energy exporter and was poised to be a major supplier of natural gas and crude oil to Europe. All of this changed once the Biden Administration took Office.
Energy prices began to rise nationally within weeks of the Biden Administration executing the first of a series of Executive Orders. These orders may have been the nexus of indicators driving up fuel prices nationally. We’ll take a look at some of the most important and we’ll end with the policies and ideologies of the Biden administration which may not manifest themselves immediately but once fully felt, will be devastating to everyday Americans.
Are prices up just because of seasonal adjustments? Or is this a permanent price change? One thing we can be sure of is that for the forseeable future the price of goods will continue to go up. Among these is the 45% increase in rental cars. Air travel, which many knew would see some sort of increase up, even while suspending in flight services such as serving alcohol.
The largest factor in the increase in fuel costs can be traced to the fiscal policy set by the Biden Administration. The recent proposed Budget which Conservatives have said are dead on arrival amount to a staggering $7trillion dollars. Coupled with this President Biden proposed a spending Bill of $9Trillion dollars. When Wall Street heard these numbers initial reaction was negative.
As the historic spending made its way across the political landscape, the specter of Inflation fears began to rear its ugly head. By proposing spending policy at such high levels the Administration threatens to borrow more money than America is worth in some policy makers opinion. “We aren’t just spending our children’s inheritance, we are borrowing ourselves into bankruptcy.” One policymaker said.
The fear of inflation or the weakening of the America dollar is what is driving up the cost of fuel. The Biden Effect is putting a squeeze on the buying power of the American dollar. It is estimated that the once powerful dollar is now being down graded. As the Biden Administration continues to propose spending policies that continue to weaken the American dollar not only will costs rise but our ability to pay for the programs and new projects is in jeopardy.