WASHINGTON, DC, July 15 — The Biden effect is taking its toll on American middle-class workers and their families sooner and more burdensome than expected. The consumer price index soared by .9% in the month of June, the largest one-month increase in 13 years; it has spiked 5.4% on a year-to-year basis, according to the Labor Department. The timing couldn’t be more worrisome as the nation reels from the impact of the COVID-19 pandemic.
It gets worse. The consensus among economists is that the rate of inflation is poised to increase at rates we haven’t seen in 20 years; in 2001 when it stood at 2.85%. In a June 16, 2021 article, the Washington Post reported that “[t]he Federal Reserve expects inflation will climb to 3.4 percent this year, higher than the central bank’s previous forecasts, while also projecting for the first time that there could be two interest rate hikes in 2023. “In its July 9, 2021 Monetary Policy Report, the Federal Reserve validated the Washington Post article advising that “[c]onsumer price inflation, as measured by the 12-month change in the PCE price index, moved up from 1.2 percent at the end of last year to 3.9 percent in May. The 12-month measure of inflation that excludes food and energy items (so-called core inflation) was 3.4 percent in May, up from 1.4 percent at the end of last year.
If you haven’t noticed, the price of gasoline has been soaring since Mr. Biden took office. The average price of regular gasoline in 2020 stood at $2.17 per gallon, according to the U.S. Energy Information Agency; it’s well past $4 a gallon in many places so far in July of 2021. And it costs more to feed your family these days than it has in years. To make matters worse, the prospects of those costs, and the basic cost of living, are for them to grow even higher in a short time.
Kristin Tate, analyst and author of the book, How Do I Tax Thee? A Field Guide to the Great American Rip-Off says that a big part of the blame is the Biden administration’s “massive new spending plans.”
Tate, in a new Opinion article published by The Hill, points out that Mr. Biden wants to spend $2 trillion on a so-called “infrastructure” bill and another $1.8 trillion on “social spending,” whatever that entails.
She says: “As if these large spending plans aren’t enough, the president requested a 16 percent increase in domestic spending in next year’s budget.”
Meanwhile, instead of seeking ways to cut spending, Congressional Democrats are seeking to get the administration to begin sending pandemic checks out on a monthly basis — as much as $2,000 a month to every adult and $1,000 a month to kids. As one cynical observer put it, “that’s certain to make a lot of voters happy; never mind that it’s likely to bankrupt us in the end.”
Cynicism aside, you have to admit that politicians offering free money can indeed appear to be an attempt to buy votes. Take the Governor of California, Gavin Newsom. He recently announced that he wants to send one-off $600 stimulus checks to nearly six million Californians as per what he calls “the biggest state tax rebate in American history.” You have to admit that it is a generous gesture on the governor’s part and that perhaps it is a coincidence that he’s facing a recall election soon and needs to convince the state’s voters that he’s really a good guy.