Bidenomics’ inflation still hurting the American family
President Joe Biden may be proud of “Bidenomics,” with its massive, seismic transformation in the size and scope of government. But to voters, it is raw pain.
Every time we open our wallets we are hit by these new, hard choices – delay our child’s braces, forgo our teen’s college contributions and pray the minivan tires hold up another month. This daily struggle of millions of families sitting at their kitchen table trying to make their hopes, dreams and numbers work is far more difficult because of Bidenomics.
How did this new bout of inflation start? The president blames corporate greed, but most Americans know better. Many recall how the inflation of the 1970s disappeared only after two hard recessions in 1980 and 1981 and President Ronald Reagan’s spending cuts. For almost 40 years, Americans enjoyed low-inflation prosperity.
Yet both in and after the pandemic, federal spending took the opposite trend it did under Reagan – it exploded. Federal spending that had averaged 20.5% of GDP since 1982 instead totaled 60.5% of GDP for the two years of 2020-21. President Biden enacted $6.2 trillion of new ten-year spending on top of the $4.8 trillion in 2021 spending projected before the pandemic hit.
In adding an extra fifth of the economy to federal spending, did anyone add an extra fifth of goods and services to the economy? No, and to the contrary, government restrictions and limitations in some places remained long after the pandemic subsided. And with so much more money floating around, inflation exploded.
Since Biden took office, prices are up 17.9%. That creates the first big problem, as wages are up only 12.7%, so working families are on average 4.5% in the hole. They need over $11,000 more each year to maintain the life they had before Bidenomics – and they aren’t making that.
But Bidenomics isn’t just about the end of the $1 pizza slice in New York City, shrinking the Dollar Menu at McDonald’s or the loss of a dozen eggs for a buck and a half. Far greater damage is being done. With the Federal Reserve trying to beat the inflation out of the economy that Bidenomics added, higher interest rates are hitting everything. Homebuyers are paying around $1,300 more for a monthly mortgage than when Biden took office.
We should recall what Joe Biden promised America in 2020: an experienced leader who would bring the nation together. By insisting that inflation has everything to do with greed and nothing to do with excessive federal spending, Biden has divided the country and neglected the lessons from our effort to overcome double-digit inflation and build low inflation prosperity for four decades.
How can President Biden claim “Bidenomics is about the future” when he has forgotten America’s economic past?
Akash Chougule is vice president of Americans for Prosperity. This was provided by RealClearWire.