LARRY KUDLOW: Biden's spending policies are keeping the accelerator on the floor

There may be no hope to truly tame inflation. That's the subject of tonight’s Riff. 

Stock market bulls continue to tout Federal Reserve interest rate cuts, but the latest Fed minutes out today throw cold water on that proposition. By the way, stocks don't need any extra juice from the Fed. The current rally is based on solid profits, which are always the mother's milk of stocks and the lifeblood of the economy. 

But consumer prices have increased around 4.6% annually over the first third of the year and, of course, nearly 20% over the course of Joe Biden's entire presidency. Prices have risen faster than wages during Mr. Biden's term, as typical working families find it difficult to live in the Biden economy.

You could add on personal borrowing costs like car loans, home mortgages and credit cards that are not counted in the CPI, but weigh heavily on families nonetheless. Then there's the never-ending Biden spending machine, and the soaring deficits and debt that go with it. 

Basically, you're looking at $2 trillion deficits as far as the eye can see. The root cause of these deficits is overspending, which is running nearly one-quarter of GDP — a peace-time record. 

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The Congressional Budget Office estimates that budget deficits will run close to $3 trillion by 2034 as spending continues unabated from Biden policies. Deficits are estimated to rise to 6% of GDP, an unheard-of level in an economy with unemployment less than 4%, and a still troublesome inflation rate. 

Debt held by the public currently totals $27 trillion and is expected to rise from the current 99% of GDP to 116%. Total federal debt is now $34.5 trillion. Net interest expense is running over $800 billion — a near unbelievable number that actually is just as costly as our national defense budget. 

And the Biden Treasury is making a huge mistake by financing its debt at the very short end of the curve through 91-day treasury bills, which are over 5.25%, significantly higher than 10-year bonds yielding about 4.5% on the inverted yield curve. 

Treasury should be selling much longer-duration bonds to avoid high interest expense and frankly to properly fund out the debt burden over a very long period of time. Perhaps 50- to 100-year bonds would make more sense for future generations than 3-month Treasury bills. 

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The problem with curbing inflation is that while the Fed has pushed down on the brake, Biden spending policies keep the accelerator on the floor. 

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And that's an inflation problem for the longer term — unless someone comes along to completely change the policy.