A year into the Civil War, Sam Upham, the owner of a stationary store in Philadelphia, began selling facsimiles of the Confederate Graybacks as souvenirs. He sold these notes in all denominations, $1, $5, $10, $100, for mere pennies. Each note had, “Facsimile Confederate Note” printed at the bottom, but they looked so authentic, that many Union soldiers going off to fight in the south, or northerners doing business down there, started buying these bills, cutting the disclaimer off the bottom, and passing them off as real Confederate bills.
From March of 1862 to August of 1863, Sam Upham’s shop printed over one and a half million facsimile Confederate notes, worth over fifteen million dollars. As the war progressed, many other shops began printing and selling counterfeit Confederate bills as well. This massive influx of new bills backed by nothing into the South’s economy, dramatically decreased the value of their dollar. By August 1863, a Confederate dollar’s buying power had dropped so low that it took $10 to buy what a year before cost $1. A pound of tea cost $35; a barrel of flour was going for $1,000. The cost to finance the war had increased ten times. The inflation was so destructive to the Confederacy’s war effort that Jefferson Davis put a $10,000 bounty out on Sam Upham’s head. The South lost the Civil War primarily because the cost to fight the war had become unsustainable. It was economics 101: the more you increase your money supply, the less valuable your money becomes.
In March 2020, in a misguided response to the pandemic, our government locked down the entire country, closed businesses and restaurants, and essentially crashed our economy. In four trading days, the Dow Jones Industrial Average dropped 6,400 points, losing 26% of its value. 14.6 million people lost their jobs due to these lockdowns. And because many citizens were destroyed financially by these government policies, Congress passed a series of Covid relief packages totaling $5.2 trillion to help the affected people get by. Government outlays in 2020 and 2021 increased by over $2 trillion more than fiscal year 2019, which ballooned our national debt to $29 trillion, and forced the Federal Reserve to print of billions of new dollars out of thin air and inject them into our economy.
Mere months after signing a $1.9 trillion American Rescue Plan, Joe Biden signed a massive $1.2 trillion “Infrastructure” Bill both of which increased government spending to an unprecedented $6.8 trillion in fiscal year 2021. The current annual inflation rate for the 12 months ending in February 2022, was 7.87% which is the highest it has been in 40 years. On February 4, 2022, Joe Biden agreed that inflation was a major problem when he said, “Average people are getting clobbered by the cost of everything today. Gas prices at the pump are up… Food prices are up.”
But then 36 days later, on March 11, 2022, the same day the Senate passed another massive $1.5 trillion spending bill, Joe Biden said, “I’m sick of this stuff… The American people think the reason for inflation is the government spending more money. Simply. Not. True… Democrats didn’t cause this problem. Vladimir Putin did… Make no mistake, inflation is largely the fault of Putin.” Vladimir Putin did not invade Ukraine until February 22, 2022, 18 days after Biden admitted to the nation that food and gas prices were up, and the people were “getting clobbered”.
The economic trend, inflation, that helped save our union 160 years ago, is working to destroy our union today. Ironically, it is not being foisted on us by our enemies, it has been created by our very leaders. But the Democrats want us to believe that it is purely coincidental that inflation hit a 40 year high at the exact time that government spending hit an all-time high. But they have been delusional or lying about inflation for over a year. In July 2021, they said that inflation was transitory, next they told us inflation was good for us, then they said inflation is not cause by government spending, and now they are claiming that inflation is all Putin’s fault. Nancy Pelosi recently assured the American people that massive government spending she has helped push through Congress, “does not increase inflation.” But she also believes that government spending is actually “reducing the national debt” which is like saying eating a tub of ice cream makes you skinny.
The ideology of Joe Biden and the Democrats has blinded them to basic economic principles, that increasing the supply of a product(dollars), decreases the price(value) of that product. And because they either cannot see or refuse to acknowledge that principle, they do not see its corollary, that decreasing the supply of a product, increases the price of that product. They refuse to admit that restricting the supply of oil and gas, drives up the price of oil and gas. The price of a product goes up usually under two conditions, when demand increases and supply stays the same, or when supply decreases and demand stays the same. The Fed artificially increased the supply of money while the demand stayed the same, so our dollars are now worth less, and Joe Biden artificially decreased the supply of oil while the demand for oil remained constant, so our gas prices have doubled and tripled.
When Joe Biden sanctioned American oil and gas production his first year in office, he created a great opportunity for the other oil producing countries around the world, many our enemies, to make higher profits. When America is producing less oil and gas, countries like Russia, Venezuela, and Saudi Arabia make significantly more money per barrel of oil because supply decreased while demand stayed the same. Gas prices doubled during Joe Biden’s first year in office. These countries are refusing to increase their supply to meet the demand because they are making higher profits for producing the same amount of oil. Increasing their oil production would drive down the price, and drive up their production costs, so it makes no sense for them to increase production. Like with inflation, Biden and the Democrats continually tell us that their policies did not increase the price at the pump – It is all Vladimir Putin’s fault.
Joe Biden and the Democrats want to make us believe that it was not a cause-and-effect relationship that the highest inflation in 40 years hit on the heels of the biggest increase in government spending in history, and that gas prices doubling, and tripling is not the result of Biden sanctioning American oil and gas production. They did the two worst things they could do, at the exact same time; they dramatically increased oil and gas prices, and dramatically decreased the value of our dollar. If China or Russia or Iran were given the power to choose only two policies that would destroy the American economy the best and the fastest, they would choose to devalue our currency, and make us dependent on our enemies for energy. It appears that Joe Biden’s policies are doing the work of our enemies, and he wants to convince us it is all their fault.
Judd Garrett is a graduate from Princeton University, and a former NFL player, coach, and executive. He has been a contributor to the website Real Clear Politics. He has recently published his first novel, No Wind.