Thanks to President Joe Biden’s policies, American families and small businesses are seeing rampant inflation that is reducing purchasing power and stretching budgets. While the Left has dismissed this inflation as “transitory,” if Biden and Congressional Democrats have their way and pass their reckless $3.5 trillion tax and spending plan, this problem will get much worse.
Prices have already increased by 5.4% in the past year, according to the Bureau of Labor Statistics – a significant increase from January when annual prices increased by just 1.4% on an annualized basis.
In the past year, gasoline has increased by 45.1%, appliances have increased by 13.7%, while fresh fruit has increased by 8.4%. Commodities have increased by 9%, airfares have increased 24.6%, and bacon has increased 8.4%.
In addition, companies including Kimberly-Clark, Whirlpool, Coca-Cola, and Proctor and Gamble are seeing increased costs that they are passing along to consumers.
At the same time, wages are decreasing. Seasonally adjusted real average hourly earnings decreased by 0.9% last month and have dropped by 1.7% over the past year. This marks a sharp contrast to wage growth that occurred before the pandemic – in 2019, median household income grew by 6.8%, a $4,400 wage increase for American families.
A key culprit for this inflation is the trillions of dollars in new federal spending over the past year, as noted by Former Clinton and Obama Economic Adviser Larry Summers. Congress has passed nearly $6 trillion in new federal funding to address the Coronavirus pandemic, including $2.2 trillion in March of 2020, $900 billion in December of 2020, and $1.9 trillion signed into law in March of this year.
To put this spending in context, there are 83.7 million families in the U.S, according to 2020 Census Bureau data. For each family, we have spent roughly $71,000 – an unsustainable level of federal spending.