“Inflation is when you pay 15 dollars for the ten-dollar haircut you used to get for 5 dollars when you had hair!

-Sam Ewing

Introduction

Under the Biden administration, the role of government in the economy has undergone its biggest shift since Franklin Roosevelt’s “New Deal” in the 1930s. Rather than fear debt and inflation, Biden is flooding the economy with dollars and spending programs.

Most Americans say the result is they are worse off than they were before he got into the White House.

Americans Are Worse Off

Between February 1 and February 3, 2023, the online I&I/TIPP Poll asked 1,358 Americans “Are you better off today than you were two years ago?” The poll has a margin of error of plus or minus 2.8 percentage points.

61 percent said they were NOT better off, 33 percent they WERE better off, and 6 percent were not sure.

Since Ronald Reagan posed this question when he was running for president against Jimmy Carter in 1980, it has become a key gauge in presidential cycles. The pattern is if an incumbent president has less than 40 percent of Americans saying they are better off than they were when the incumbent president began his reign, chances for reelection are not good.

Inflation is Crushing Americans

Biden’s reckless spending, financed by the printing of dollars by the Federal Reserve which caused massive inflation, drove up grocery prices in 2022 by 13 percent, the largest price increase in 40 years.

The average family, when rising prices are combined with falling real wages after inflation, has lost $7,400 in income since Biden took office.

Retail Sales Crash

Retail sales in December 2022 had their biggest drop in a year, the second straight monthly decrease in retail sales.

Manufacturing output in December 2022 recorded its biggest drop in two years.

Credit Card Debt is Maxed Out

The total amount of credit card debt has reached an all-time high while the savings rate has hit an all-time low.

The average interest rate on credit card debt has reached an all-time high of 19 percent.

Discover Financial Services, which traditionally targets low to middle-income families for their credit cards, forecast they will likely more than double credit card charge-offs to 3.9 percent this year compared to the 1.8 percent in charge-offs they took in 2022.

Conclusion

Low, stable inflation and interest rates have powered the economy for the last three decades. As this scenario unravels, the country is facing its most challenging years since the 1980s.

Photo by Veleno Veleno

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