That's assuming only one factor, consumer spending. Pouring massive amounts of dollars - or anything else - into the system will devalue what's already there. That's just simple law of supply/demand.
Many other factors *without* rising economic activity such as rising oil prices can cause inflation as well. Biden is doing everything possible to kill our domestic production and destabilizing the Mideast.
And people who tell us the 2008 helicopter dumps didn't cause inflation are just wrong. Compare the price of nearly ANY product - even CPI products - from then to now.
Yeah, I hate what Biden is doing to the energy sector and that may well result in inflation which will spread through the other products.
But it might be mitigated. The world changed last year. Work from home is now a permanent thing. And it may grow rather than revert back to pre-covid.
Once my company realized the work was still getting done they gave us a choice of work from home 100%, work from office 100% or 50/50. I chose work from home 100%.
I’ve cut my gas expenditures by over $3000/year to 1/16th of what it was. And even after covid is over, it will probably still be 1/8th of pre-covid.
US transportation accounts for 70% of US oil consumption. And 65% is for personal vehicle consumption. So 65% * 70% is 45% of US oil consumption.
Now if 20% of the workforce switches to permanent work from home, that’s a permanent 9% drop in oil consumption.
And while oil does impact everything from fertilizer costs to plastics to you name it, it’s often a small percent of the total product costs.
I found a couple of charts. From 2000 to 2012 Oil increased from $20 a barrel to $120 a barrel. In that same time, the FAO food index increased from 80 to 220.
So a 6x increase in oil prices coincided with a 2.75x increase in food prices during the same 12 year period. 2.75x/6x = 0.46.
Oil is currently $65/barrel. So if oil doubles from here, we could expect to see up to a 46% increase in the price of food. I don’t remember food prices falling with the oil price drop, so food prices might be able to absorb some significant oil price increases before having to adjust upward.