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Inflation hurts everyone, but it’s particularly harsh on the poorest of our population. If people aren’t earning more, they are having to make due with less.
Project 21 member Michael Austin, who also serves as president of Knowledge & Decisions Economic Consulting and as an economic advisor to Kansas legislators, puts a major dent in President Joe Biden’s claim that his big-spending agenda isn’t costing the American people anything. In fact, Michael suggests that the Biden Administration is ignoring economic common sense at the expense of at-risk communities.
The prestigious Wharton School of Business assessed the federal Consumer Price Index (CPI) – a measure of consumer costs over time – to find that inflation has forced Americans to spend more to live in 2021 than they did in 2019 or 2020.
Michael expanded upon Wharton’s research to show how this inflation has had a profound impact on the lower classes of the American economy. He also created his own charts to emphasize his points.
Here is his analysis:
A wise man once said the first lesson of economics is that there is no such thing as a free lunch, while the first rule of politics is to ignore the first rule of economics.
Research has given us a glimpse of the real costs of Joe Biden’s “cost zero dollars” economic policy. American families are set to become $3,500 poorer thanks to Biden-led inflation.
Researchers at the University of Pennsylvania’s Wharton School of Business analyzed the impact of this year’s inflation on American households. Specifically, they tried to answer how much American households would have to spend if they wanted to maintain their 2019 or 2020 standard of living. They reported that “inflation in 2021 will require the average U.S. household to spend around $3,500 more in 2021 to achieve the same level of consumption of goods and services as in recent previous years.”
To put this in context, the average American household would have to increase its budget by seven percent just to buy the same amount of goods and services as it did two years ago.
Now ask yourself: Is your income seven percent or more higher than it was two years ago? If not, you are now poorer despite no change in tax rates.
That’s the burden of inflation and the burden of excessive government spending. Not only is government buying too many goods and crowding out private sector activity, but it is also making it too easy for Americans to spend without end and stay home without working.
Fixing bloated government is the only way out of this mess. Biden’s free lunch is simply too expensive for Americans to afford.
Author: David Almasi