The same economic experts who a year ago confidently predicted that inflation was "transitory" are now predicting that inflation - now at a 40-year high - is already on the way down and the economy is on solid footing.  Don't believe them.

Federal Reserve Chair Jerome Powell testified before a congressional committee last June, soon after consumer prices jumped 5 percent in May 2021 compared with a year earlier, which was at the time the largest increase in 13 years.  The Fed's long-term inflation target is 2 percent.  

"The incoming data are very much consistent with the view that these are factors that will wane over time and then inflation will then move down toward our goals," Powell told lawmakers.  "Transitory inflation" became the watchwords of the Biden administration.

Only, inflation wasn't transitory. It remained above 5 percent during the summer of 2021, went above 6 percent in October, hit 7 percent in December and 8.5 percent in March 2022.  Those are statistics that have real-world implications:  people priced out of the housing market, plans for higher education deferred and tough choices between food and medicine.

In discussing inflation last November, Powell said it was "probably a good time to retire that word" - transitory.  In a recent CNN interview, Treasury Secretary Janet Yellen conceded, "I think I was wrong then about the path that inflation would take."

But the persistence of high inflation was completely predictable.  It is the direct result of fiscal and monetary policies that anyone with a basic understanding of economics knew would drive prices higher: literally trillions of dollars of spending programs, a huge expansion of the Federal Reserve's balance sheet - from less than $4 trillion to $8.5 trillion between March 2020 and March 2022 - and the perpetuation of artificially low interest rates for far too long.

On the monetary side, the Fed has begun ratcheting up interest rates, and last month announced plans to start shrinking its balance sheet by tapering the purchase of bonds.  These are welcome, if overdue, steps.  

But on the fiscal side, the only plan the Biden administration seems to have is to spend even more money and create even more debt for future generations under Build Back Better -programs to reduce the costs of prescription medications, healthcare and care for the elderly, and to promote the Green New Deal.  Even if you think these programs have merit, there's no plan to pay for them and no accounting for the economic, social and health-related harm that inflation and debt inflict on American families.

Nowhere is the link between Biden administration policy and inflation clearer than in the case of energy.  Record high prices for gasoline are one of the biggest drivers of inflation, and those prices are the direct result of the cancellation of the Keystone Pipeline, a sharp rise in the royalties companies must pay to drill on federal lands and general hostility to the U.S. energy industry.  As a prime example, President Biden nominated, but ultimately withdrew, a candidate for the Federal Reserve Board of Governors who advocated against the Fed and U.S. banks making capital available to "a dying industry" - the U.S. energy industry.

Since the beginning of the pandemic, it's become unfashionable to talk about debt.  However, it's worth noting the national debt has grown from about $23 trillion at the beginning of 2020 to more than $30 trillion today, or more than 30 percent.  With rising interest rates, that means debt service will take a bigger bite out of the federal budget, driving more deficit spending.

The other problem is that supposedly temporary spending programs, subsidies and tax credits - like the ones justified as economic relief during the pandemic - tend to actually go on indefinitely.  That's why the true costs of Build Back Better are likely to be closer to $4 trillion rather than the $1.75 trillion the Biden administration and congressional Democrats have touted.  

Some nations have deliberately used inflation to reduce debt burdens, paying down debt with devalued currency.  Bond holders and the economy lose, government big spenders win. In fact, there's a perverse incentive for the big spenders to keep on spending.  As the Penn Wharton Budget Model noted unironically in a recent report, "Increasing the current annual inflation target regime from 2 percent to 3 percent inflation reduces debt while lowering GDP."

Imagine how much more rapidly we could reduce the national debt with an inflation rate of 8.5 percent - and how much further we could lower GDP and the prosperity of the American people. 

So, no - inflation is not likely on the way down in any meaningful way and the economy is not on solid footing.  Not without a recognition by the Biden administration that its fiscal policy and focus on the Green New Deal have done as much to stoke inflation as the Fed's easy money policies.

Dennis E. Nixon is CEO of International Bank of Commerce in Laredo, and chairman of the board of International Bancshares Corporation.