Inflation is running rampant in Joe Biden’s America. The Bureau of Labor Statistics (BLS) found that in June, consumer prices increased by 5.4 percent on an annualized basis. From May to June, consumer prices increased by 0.9 percent. In January 2021, before Joe Biden took over the presidency, annual inflation was at a stable 1.4 percent. While 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:
- Gasoline has increased 45.1 percent in the past 12 months.
- Energy 24.5 percent in the past 12 months.
- Bacon has increased 8.4 percent in the past 12 months.
- Fresh fish and seafood has increased 6.4 percent in the past 12 months.
- Fresh whole milk increased 7.5 percent in the past 12 months.
- Fresh fruits increased 8.4 percent in the past 12 months.
- Major appliances increased 13.7 percent in the past 12 months.
- Furniture and bedding increased 8.6 percent in the past 12 months.
- Footwear increased 6.5 percent in the past 12 months.
- Airfares increased 24.6 percent in the past 12 months.
- Commodities have collectively increased 9 percent in the past 12 months.
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.”
The erosion of purchasing power is especially concerning given that wages are decreasing. The BLS found that seasonally adjusted real average weekly earnings decreased 0.9 percent in June. Seasonally adjusted real average hourly earnings have declined by 1.7 percent over the past year.
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."
With these trends in mind, it is especially concerning that President Joe Biden is pushing a multi-trillion dollar 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.
The Biden administration has also proposed trillions of dollars in tax hikes on businesses. This, similarly, will be passed on to consumers through higher prices. Raising the corporate income tax from 21 to 28 percent will certainly have this effect. According to a 2020 National Bureau of Economic Research paper, 31 percent of the corporate tax rate is borne by consumers through higher prices of goods and services.
The Biden administration should focus on growing the economy and helping businesses and working families. Instead, at the expense of Americans’ financial security, they are pushing massive new spending projects to finance a liberal wish-list.