Back-to-school season is here, meaning parents will shop for clothes, shoes and supplies for their children — and discover the costs of those goods have increased substantially since last year.

Gary Wolfram, an economist and author of “A Capitalist Manifesto,” wrote: “When you can buy less of all goods with the same amount of money, then you have inflation.”

Americans experience inflation across the economy. Government officials blame oil producers, manufacturers for shrinking product packaging, labor markets and unions. But Daniel Lacalle, an economist and author of “Freedom or Equality,” said: “Inflation is not a coincidence. It is a policy. The only real cause of inflation is government spending.”

What policy creates inflation? The continued failure of the federal government to balance the national budget results in spending more money than taxes and fees generate in revenue. Lacalle is correct: The cause of inflation is government policy. The last time the federal budget balanced was in 2001. President Bill Clinton and a Republican- controlled Congress balanced budgets from 1998 to 2001. Dereliction of duty by elected leaders of both parties has created an unsustainable imbalance because of extravagant government spending and printing money.

American journalist and author Henry Hazlitt wrote in “The Inflation Crisis and How to Resolve It” the cure for inflation is to stop printing money to cover debt. Therein lies the challenge. Excessive government spending is the result of government efforts to redistribute wealth and income. Huge federal giveaways are a ploy for elected officials to ingratiate themselves to voters and remain in power. Hazlitt warned radical decisions to solve inflation are disagreeable.

Argentinians experienced Hazlitt’s warning. Daphne Posadas, political and international affairs analyst and author of “Argentina’s Recent Inflation Trends Are Proving Hazlitt Right,” wrote this: “When Javier Milei assumed the presidency in December 2023, monthly inflation skyrocketed to an unprecedented  25.5 percent. Within five months, Milei’s administration managed to reduce this figure by more than 20 percent. The trend indicates potential stabilization of the Argentine economy. To achieve a zero deficit, Milei enacted a 35 percent reduction in public spending. He did this by closing half of the ministries and secretariats, suspended public works for a year, reduced subsidies for energy and transportation, canceled government advertising and maintained the 2023 budget for 2024. These measures, although unpopular, yielded results. Milei’s government not only avoided a deficit, but actually achieved a surplus, and most importantly, inflation began to decline.”

The United States hasn’t had a budget surplus in more than two decades.
But Argentina demonstrated how achieving a budget surplus is possible. The results have been noteworthy in lowering the inflation rate. Correcting years of poor fiscal policies take time and effort. But the results include lower inflation and higher productivity. A balanced budget equals a healthy economy.

Daniel Di Martino, an economist and graduate fellow at the Manhattan Institute, wrote that President Milei described himself as a kind of shock therapy to Argentina’s historic economic crisis fueled by decades of government spending. Milei blamed Argentina’s backward economic policies for its plights — policies, he pointed out, spreading across the world. As Di Martino observed, Milei isn’t afraid to speak truth to world powers. At the 2024 World Economic Forum in Davos, Switzerland, Milei said: “The main leaders of the Western world have abandoned the model of freedom for different versions of what we call collectivism. We are here to tell you that collectivist experiments are never the solution to the problems that afflict the citizens of the world — rather they are the root cause.”

Free market principles work. What doesn’t work are politicians who ignore the cause and effect of poor fiscal policies and demonstrate no interest in making cuts to the bloated bureaucracy and deficit spending. Politicians recommending subsidies and additional federal programs as a way to curb inflation either don’t understand basic economics or lack the courage to take the draconian measures necessary to curb deficit spending.

Back-to-school items will cost more. Don’t blame the manufacturers of crayons, paper products and apparel. Blame politicians who’ve long neglected their fiducial responsibilities — and voters who don’t hold politicians accountable.