President Joe Biden has repeatedly claimed the U.S. economy is in good shape, even arguing that it is “stronger than before the pandemic.”
However, Americans are not experiencing the "strong" economy Biden describes. Instead, inflation is running rampant and increasing prices for American families and small businesses across the country.
In January, the consumer price index increased by 7.5 percent on an annualized basis, a 40-year high. This marks a sharp increase from January 2021, before Joe Biden took over the presidency, when annual inflation was at a stable 1.4 percent.
In 2021, the average U.S. household spent $3,500 more due to inflation, according to a Penn Wharton University of Pennsylvania Budget Model analysis.
The personal consumption expenditures price index, which measures prices paid by people for domestic purchases excluding food and energy, rose by 5.8 percent in December 2021.
This inflation is disproportionately harming low-income households -- 71 percent have reported experiencing financial hardship due to rising prices. Of the 71 percent, 28 percent of low-income households say they have experienced “severe hardship” due to rising prices, and 42 percent say they have experienced “moderate hardship.”
The administration touts Americans earning higher wages, but neglects to mention that inflation has outpaced this wage growth. As a result, real average hourly earnings have dropped by 1.7 percent on an annualized basis.
Since July, the Biden administration has been insisting this problem would go away. Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen repeatedly described inflation as "transitory."
Evidently, this was not the case.
Now, 60 percent of Americans say they disapprove of Biden’s handling of the economy.
Many of the policies being pushed by Biden have made the economy worse.
For instance, the Biden administration has undermined American energy independence. In the past year, President Biden signed an executive order banning new drilling leases on federal lands, pursued more than $20 billion in new energy taxes on oil and natural gas production, and vetoed permitting for the Keystone XL pipeline.
Biden has also pushed trillions in new spending that have made inflation worse. After spending trillions in 2020 to fight the COVID-19 pandemic, the Biden administration passed an unnecessary, additional $1.9 trillion spending bill in March.
Almost a year after this last funding bill was passed, $1 trillion in COVID-19 funding has not been spent and $500 billion hasn’t even been allocated. The Biden spending bill also included extended a federal program that paid people not to work for months.
A new National Bureau of Economic Research working paper found these unemployment benefits prolonged the struggling job market and reduced employment.
States that continued to participate in additional unemployment benefit programs experienced a 0.8 percent higher unemployment rate in July and a 0.7 percent higher unemployment rate in August than they would have if they suspended benefits. In states that terminated the program early, the flow of unemployed workers into employment increased by two-thirds.
These benefits had such a severe depressive effect on employment that 18 states declined money from the federal government and ended their participation in the programs.
The policies being pushed by President Biden has led to stagnant economy where inflation is out of control, energy prices are up, and Americans are being paid not to work.
However, Democrats continue to push trillions of dollars in new spending and tax increases that will make these problems worse.
For instance, House Democrats passed legislation which includes $1.5 trillion in tax increases on businesses and working families, including a 15 percent global minimum tax, a 15 percent domestic minimum tax, and a new surtax on adjusted gross income (AGI) that will hit pass through businesses. These taxes won’t be paid by wealthy corporations but will be passed along to consumers through higher prices and workers in the form of lower wages.
According to a 2020 National Bureau of Economic Research paper, 31 percent of the corporate tax rate is borne by consumers through higher prices of goods and services. Similarly, a study by the Tax Foundation finds that 70 percent of the corporate tax is paid by workers.
American families and businesses across the country are being hit with higher prices and stagnant wages. These are undoubtedly a result of the failed policies being pushed by Congressional democrats and President Biden. However, instead of pushing to fix this problem, the Left is pushing new taxes and spending that will exacerbate this damage.