EDITORIAL: The budget deficit soars as inflation make a comeback

As inflation cooled over the past year, President Joe Biden ran atop the podium to claim his medal. Turns out the race wasn’t over.

On Wednesday, the government announced that inflation bumped up 3.2 percent in July, with core prices rising 4.7 percent. It’s the first upturn in the economic gauge since last year, and it was driven by higher prices for food and services, including automobile repair and housing costs.

To be sure, this is not the 9.1 percent inflation from a year ago. But it’s also well above the rate when Mr. Biden took office. Any credit the president takes for tamping down rising prices must also recognize that it was “Bidenomics” which created the problem in the first place.

Economists sympathetic to the White House insist the July increase is an outlier. We’ll see. Other economists “are predicting that rising oil and gas costs could lead to another rise in inflation in August, though they expect prices to settle back down this fall,” according to The Washington Post.

But despite the varying opinions on inflation trends, there can be little doubt that Bidenomics has led to an unprecedented blowout of red ink. Remember Mr. Biden laughably taking credit for falling deficits as COVID spending came off the books? There’s a reason he has finally clammed up on the subject. The Congressional Budget Office last week revealed that the deficit had hit $1.62 trillion for the first 10 months of the fiscal year, up 55 percent from the year previous.

This comes after the Fitch agency downgraded the nation’s credit rating this month in response to the rising $32 trillion national debt and the unwillingness of Congress and the president to do anything about it.

“The deficit this year and next year are on track to be 50 percent larger than before the pandemic,” noted Maya MacGuineas, president of the Committee for a Responsible Federal Budget, “despite the fact that the pandemic is over and the economy seems to be growing at a steady clip.”

And as the Fed has ramped up interest rates to fight Mr. Biden’s inflation, interest payments on the debt have “climbed to 15.5 percent of all federal revenue,” The Wall Street Journal notes, and will keep soaring. “Much more debt will be needed to finance the Biden spending binge that has only begun for the Inflation Reduction Act, the Chips Act and the infrastructure bill,” the paper observed.

Job growth has remained a bright spot under this administration. But balance that against a $32 trillion national debt, annual deficits exceeding $1.5 trillion, rising prices, soaring interest rates and record federal spending. This is the “progress” of Bidenomics.