On Thursday, Vice President Kamala Harris explained why the Biden administration’s profligate spending and big-government solutions take a devastating toll on Americans. In a joint press conference with President Joe Biden, Harris touted the administration’s child tax credit payments, but in doing so, she unwittingly strengthened Republicans’ arguments against her.
“Every month, American families need to buy groceries and gas, to pay for rent or homeowners insurance, utilities and car loans. And even if they have enough to make ends meet, it is often just barely enough,” Harris said. “One unexpected expense could mean the difference between taking on more debt and losing it all.”
She touted the increased child tax credit as the vital relief that American families need, but her remarks also illustrated how the stranglehold of inflation undermines Americans’ ability to make ends meet.
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The Core Consumer Price Index (CPI) for all items rose 5.4 percent for the 12 months ending in June 2021, the Bureau of Labor Statistics (BLS) reported. The prices for consumer goods and services, excluding food and energy, shot up 0.9 percent over May, so the index for all items minus food and energy rose 4.5 percent over the last 12 months, the largest 12-month increase since the period ending November 1991. The energy index rose 24.5 percent over the last 12 months, and the food index increased 2.4 percent.
Harris accidentally makes the case for why Biden’s hidden tax of rising prices is so devastating.
Median national rent was up 9.2% in the first six months of 2021.
And on a 12-month basis in June:
*Food prices up 2.4%
*Gas prices up 45.1%
*Electricity prices up 3.8% pic.twitter.com/F7gBVsEGaU— RNC Research (@RNCResearch) July 15, 2021
These rising prices amount to a hidden and insidious tax that robs the poor and the middle class. It favors the U.S. government, the world’s biggest debtor, because the government pays back its creditors using Monopoly money. It crushes the real earnings of American households and destroys their savings.
While the Federal Reserve has downplayed the threat of inflation, economists at Deutsche Bank sounded the alarm, warning that Biden’s economic policies seem based on an irrational belief in a Goldilocks economy.
“The most basic laws of economics, the ones that have stood the test of time over a millennium, have not been suspended. An explosive growth in debt financed largely by central banks is likely to lead to higher inflation,” Deutsche Bank economists warned. “We worry that the painful lessons of an inflationary past are being ignored by central bankers, either because they really believe that this time is different, or they have bought into a new paradigm that low interest rates are here to stay, or they are protecting their institutions by not trying to hold back a political steam roller.”
The authors warned that “neglecting inflation leaves global economies sitting on a time bomb.” They noted similarities between the 1970s and today.
“Rising oil prices could compound any consumer-driven inflation. Indeed the price of oil has haunted the Fed before. A series of oil shocks contributed to the ratcheting up of inflation during the 1970s, but the Burns Fed chose to focus more on the CPI excluding oil. Then it excluded surging food prices and the idea of ‘core’ inflation took shape. Subsequently, more and more items were excluded. Eventually, however, the Fed recognised that all the supposed transitory sources of inflation had spread everywhere and double-digit inflation had leaked into the ‘core’,” the Deutsche Bank economists wrote.
While the Fed and many economists insist the inflation will be temporary, consumer expectations for inflation over the coming year reached the highest level ever, according to a survey from the Federal Reserve Bank of New York.
Meanwhile, unemployment remained at 5.9 percent in June. This persistent unemployment should not surprise Americans who are familiar with the Democrats’ $1.9 trillion blue pork bill masquerading as a “COVID-19 relief” stimulus. Only 8.6 percent of the funding went directly to combatting the pandemic, while hundreds of billions went to blue-state bailouts. The bill also sent $1,400 checks to individuals and extended the $400/week “enhanced” unemployment benefits.
Thanks to this “enhanced” unemployment, many workers make more money without a job than they did when they had one. Rather than reconsidering this perverse incentive not to work, Biden and his fellow Democrats further entrenched it.
Biden’s other policies would also make the economic situation worse. The president has called for Congress to spend trillions more in social programs that his tax plans cannot hope to fund. Essentially printing money decreases trust in the U.S. dollar and sparks inflation.
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Inflation brought down Jimmy Carter in 1980, ushering in the Reagan revolution. Tragically, it also made life hell for Americans in the meantime. Kamala Harris just explained how it feels.
