Rising inflation is Biden’s hidden tax on American workers
The highest tax President BidenJoe BidenFirm Behind Arizona Audit Says No Data Was Destroyed, Contradicting GOP Claims Stacey Abrams Not Being Biden’s Vice President: “He Picked The Right Person” Night Defense : Top Dem cancels request for delayed arms sales in Israel | Withdrawal from Afghanistan up to 20% complete Esper returns to defense industry READ MORE is a levy on Americans that has never been passed by Congress, promised by the White House, or voted by citizens at the polls. The invisible tax on rising inflation will do much more to hurt working and middle class Americans than the tax hikes proposed by Biden. Trillions of dollars in congressional spending and printing money from the Federal Reserve are already having a dramatic effect on the price of ordinary commodities. Inflation has reached its peak The highest point in years, and will probably reach the highest in two generations.
Over the past year, food prices have increased 3.5 percent, with eggs and meat up more than 5 percent; the gas rises 22 percent and should get even higher by this summer; the wood is in place 250 percent; new home prices are on the rise $ 36,000, with overall housing up 11 percent; and new cars are in place 9 percent, the highest for 68 years. In April, 13 percent of new car buyers paid more than the sticker price. Other goods – housewares, baby care products and general merchandise – are already up 5.2-7.2% from the same period last year. The cost of restaurant meals has skyrocketed 3.7 percent over the past year, and some takeout specialties like chicken wings have almost doubled. Coffee futures are on the rise 24 percent since October. Even growing your own food has skyrocketed, with the cost of seeds and potted plants skyrocketing 10.5 percent.
The problem is fueled by the sharp rise in the prices of basic commodities essential to our basic needs. Microchip prices have increased by 25 percent over the past year, the price of items ranging from telephones to televisions to auto parts has increased. At the same time, rising corn prices will have an additional impact on a variety of food products. Corn prices have almost doubled since the start of the pandemic and hit a low 13 years high. Along with maize, food prices are supported by a 59 percent increase in pork, 23 percent increase in soybean costs and 21 percent increase in wheat prices. Whatever increase we have seen in grocery and restaurant bills will only accelerate as the trend continues.
In short, consumer prices are at their highest for eight and a half years. Economists now see not only the risk of inflation ”higher than in the last two decadesBut the distinct risk that the Federal Reserve will have to raise interest rates by the end of 2022.
The main driver of current inflation is money printing by the Federal Reserve. The Fed has almost doubled its bond purchases since the start of the pandemic, almost pumping out $ 4 trillion in the economy. That’s about as much as the Fed bought between 2008 and 2014, at the worst of the Great Recession. From February 2020 to March 2021, the total of cash in circulation, mutual funds and money supply in bank deposits increased from $ 15.473 billion to $ 19.896 billion. The Fed effectively monetizes the federal government’s debt, both creating cover for larger deficits and further increasing the money supply. From 2019 to today, the national debt has grown from just under 80% of gross domestic product to over 100%.
The second source of inflation comes from massive public spending. Between several hastily adopted “emergency” measures under the guise of pandemic relief and President Biden’s massive new spending plans, we examine the potential for economic stagflation of the 1970s. Biden wants to spend nearly $ 2 trillion dollars for a badly named “infrastructure” bill and $ 1.8 trillion in new social spending. Combined with the already adopted COVID-19 2021 relief plan, this spending will total $ 6 trillion, more than double the entire federal budget before the Great Recession. As if these big spending plans weren’t enough, the president called for a 16 percent increased domestic spending in next year’s budget. Is he compensating for the increase in social spending with cuts in the army? No – the Pentagon’s proposed budget is up 1.5 percent.
Worse yet, the government seems less than concerned about the possibility of high inflation. secretary of the treasury Janet YellenJanet Louise YellenOn The Money: Suppressed consumer demand fuels post-pandemic spending frenzy | Biden, Harris Release Tax Returns for 2020 Yellen Proposes Corporate Tax Hikes to Corporate Groups Economist Richard Wolff Says Higher Salaries Needed to Accelerate Job Growth READ MORE said last week she didn’t care. The White House says any observed inflation will be moderate and temporary.
However, the reality does not match the optimistic projections of the White House. American savings rate greatly increased after the government distributed $ 3,200 in direct stimulus payments, plus generous unemployment bonuses that reduced the pool of available labor. Much of this money saved and printed will soon show up in the economy in a post-pandemic consumer spending spree. In short, there is far too much money out there for an increasingly limited supply of goods, be it food, cars, gasoline, houses or more. It’s almost the classic definition of inflation.
Inflation manifests itself in parameters that government statistics or recurrent spending often do not immediately highlight. The sharp rise in the prices of commodities, investments, and other assets – think cryptocurrency, gold, silver, and the stock market – shows a bigger picture than the sheer average of inflation in the consumer price index or money supply figures. Many Americans don’t know the double-digit inflation of the 1970s and 1980s, but Biden, who served in the Senate at that time, is not. The president seems to have to repeat many of the most painful mistakes of the era – mistakes that have led to increased economic dysfunction, a series of severe recessions, fuel shortages and finally a conservative Republican to clean it up.
Kristin Tate is a libertarian writer and analyst for Young Americans for Liberty. She is an author whose latest book is “How do I tax you? A field guide to the great American scam.”Follow her on Twitter @KristinBTate.