Inflation Slamming Working Families, Students
Our friends at NewsMax recently posted an op-ed by renown investment guru George
Mentz that quantified, once again, just how bad the Biden economy is for America's working families.
Here's a list of everyday items compiled by Mr. Mentz and how much inflation has driven up their cost over the past year:
Butter up 80%
Potatoes up 55%
Juice up 36%
Rice up 25%
Milk up 25%
Cheese up 24%
Lumber up 19%
Coffee up 20%
Cotton up 16%
Eggs up 172%
Salmon up 60%
Pork/Hogs up 41%
Lithium for Batteries up 386%
Coal up 134%
Natural Gas for Heating up 125%
Heating Oil up 67%
Oil up 200% (since the presidential election of 2020)
Gas was 95 Cents a Gallon at Election 2020
Mentz reported that according to Rent.com, the rental prices even in the heartland city of Denver are up an average of 15% over last year. The national median rent increased by a record-setting 17.6% in 2021.
Even Fortune magazine analyzed a basket of goods and necessities for inflation and found a 24% increase in costs for the poor and middle-class on everyday items since 2020.
The cost for food and housing is through the roof for students also, and many students are now struggling with food insecurity. These increases in costs plus the rise in auto and credit card loan interest is killing working-class folks in 2022, observed Mr. Mentz.
George Mentz hit the bullseye when he identified working class folks as those who are suffering the most in the Biden economy, but as we’ve observed before, the Democrats are doing the exact opposite of what Economics 101 suggests would be the quickest and least painful way to bring inflation under control.
In the midst of a recession, with inflation eating away an average of $6,800 in purchasing power from the incomes of families with two workers, the so-called Inflation Reduction Act would impose tax increases, manipulative federal subsidies, and price controls on every American family.
The bill would deepen the growing recession, continue to depress household incomes, and will continue to increase prices, wrote a team of economists in a column for the Heritage Foundation’s Daily Signal.
The Democrats’ so-called “Inflation Reduction Act,” negotiated chiefly by Manchin and Senate Majority Leader Chuck Schumer, D-N.Y., is intended to raise taxes by roughly $570 billion over the next decade—$4,500 per household.
Got that? On top of a $6,800 hit to their purchasing power from inflation, Democrats want to take an average of $4,500 per household in new taxes from America’s working families.
The Heritage Foundation team also found the bill would increase spending on crony corporatist subsidies and wealth redistribution by roughly $510 billion over the next decade. However, the true cost would be nearly $200 billion higher after accounting for budget gimmicks.
The bulk of the new subsidies are designed to have a far greater impact than their price tag implies. These subsidies could shift trillions of dollars of investment away from conventional energy sources and into green energy pipe dreams.
This shift would leave our economy smaller, less dynamic, and less innovative, and will trap millions in poverty. The bill also contains $250 billion in on-paper spending cuts that simply reflect the burdens of the drug price controls in the bill.
Far from helping consumers, these price controls will mean fewer lifesaving drugs are produced and will slash vital research budgets.
To add insult to injury, the spending will be front-loaded, and the revenues will be back-loaded. Though supporters of the bill claim it will reduce deficits over the next decade, it will likely increase deficits in the first few years, stoking inflationary pressures in the near term.
Democrats would like you to forget that the real cost of government isn’t what it taxes, it is what it spends.
The best path to take would be to drop the distortionary tax increases and spending subsidies, and instead reduce the deficit by cutting spending.
In truth, reducing the size, scope, and coercive intrusions of the government is the only way to mitigate inflation and lift the economy out of a recession at the same time.
Tragically, this bill does none of those things. Instead, it doubles down on the disastrous policies that got us into this “stagflationary” mess.
Joe Biden economy
drug price controls
government spending cuts
Inflation Reduction Act