Inflation is running rampant in Joe Biden’s America. The Bureau of Labor Statistics found that in May, consumer prices increased by 5 percent on an annualized basis, the fastest increase since 2008. While this inflation has already hit American families hard, President Biden is pushing policies which would this problem even worse.
According to BLS, the cost of many goods and services have increased significantly over the past year. For instance, lumber costs have increased 375 percent, car rentals have increased 110 percent, gasoline has increased 56 percent, airfares have increased 24 percent, and major appliances have increased by 12.3 percent. Furniture has increased 9 percent, whole milk has increased 7.2 percent, bacon has increased by 13 percent, and clothes have increased 6 percent.
Not only does inflation harm consumers by increasing household costs, but it can also have long lasting economic damage. As detailed in the New York Times:
“Inflation can erode purchasing power if wages do not keep up. A short-lived burst would be unlikely to cause lasting damage, but an entrenched one could force the Fed to cut its support for the economy, potentially tanking stocks and risking a fresh recession.”
With these trends in mind, it is especially concerning that President Joe Biden is pushing a multi-trillion budget, taking the U.S. to its highest sustained levels of federal spending since World War II, which is considered one of the most financially desperate times in American history. The budget calls for $6 trillion in spending for Fiscal Year 2022, spent on “infrastructure” and “human infrastructure.” In reality, these plans are packed with wasteful spending. Flooding the U.S. economy with this kind of spending is bound to exacerbate inflation.
Former US Treasury Secretary Larry Summers, a Democrat, has warned that Biden’s heaving spending could lead to stagflation. Janet Yellen, the Biden administration’s Treasury Secretary, suggested that if inflation “becomes an issue”, the Federal Reserve may have to raise interest rates, which could severely impede the recovery. In fact, all these factors could throw us into a deeper recession than before.
Biden’s policies have already resulted in a sluggish recovery. For example, job growth has been incredibly disappointing due to the administration’s federal unemployment insurance benefits. The simple threat of Biden’s tax hikes has resulted in some companies implementing a hiring freeze and/or putting off other investments and company plans.
Despite the Biden administration’s assurances that inflation should not be a concern, voters are still deeply concerned about it.
88 percent of voters say they are concerned about increased inflation, according to a recent Harvard CAPS and Harris poll. When asked what causes inflation, the top three answers were “Massive government spending,” “Significant amounts of money being injected in the economy by the Federal Reserve,” and “Uncontrollable government deficits.”
The Biden administration should focus on growing the economy and helping businesses and working families. Instead, they are pushing massive new spending projects to finance a liberal wish-list. With inflation concerns growing, this is a particularly bad time to be trillions in new spending.