Fuel prices... UP
Material Prices... UP
US Dollar... DOWN
Federal Reserve Rates... DOWN
Government Spending... UP***
Add this up and hold on to your ***** and assets. Inflation is going to be HUGE over the next several years and there's really not much that can be done at this point.
I don's see us at Carter level of inflation, but probably double what it has been last couple of years. Here's why:
There are too many dollars chasing too few goods that are getting more expensive anyway due to manufacturing costs, shipping costs and since most come from overseas now, the fact that the US dollar is 2/3's what it was 5 years ago.
This has very little to do with Presidential action or inaction, except that he signs off on spending and taxing bills. The best thing that the US government can do is the following:
1) Quit dropping federal reserve rates. The markets won't like it and there may be a bump in forclosures, but those for the most part are the loans that the mortgage companies should never have made. Credit card debt will probably increase as well because the American People are too credit happy.
2) Quit wasteful spending. Not all spending as "Trickle-Down" works pretty damn well as was seen after about 8 years of doing it. It takes time, but it works without major inflationary pressures. Military spending NEEDS to INCREASE rapidly as we will need to prepare to fight another major war with another superpower. Quit giving economic assistance to countries that are critical to our existance.
3) Cut taxes. Across the board. Everyone gets a 3% cut. If you don't pay taxes, sorry you don't benefit. If you are in the $200,000+ bracket, you get your 3% cut just as much as the $40,000 guy. Make the tax cut permanent. Drop the marriage penalty (actually, make it more of a single penalty to help encourage marriage instead... but I digress). Drop the Death Tax.
4) Curb imports from "enemy" countries.... that is not necessarily evil enemies, but countries that are sponsors of other countries that are evil.
5) Mirror Tarriffs and Tax Rebates. If we import cars from Japan, they better accept imports from the US of like goods without tarriffs or taxes or we apply the same duties to their goods. International Trade is not a one-way street.
6) IMMEDIATELY remove most restrictions to energy exploration within our own borders.
Just a start.
