Red Hot Inflation Hits Working Americans, Retirees Hardest
Last year, as President Biden signed his massive $1.9 trillion “stimulus” bill, he defended it as giving working Americans “a fighting chance.” More than a year later, we are still waiting on that chance at economic recovery. Instead, the President’s spending has given us the worst inflation in 40 years, which is eating up paychecks, savings, and family budgets. Living standards are falling, especially for retirees and those on fixed incomes. Gas prices are through the roof and still rising. And millions of Americans have been forced to take a second job or work extra hours to make ends meet. As former Obama Treasury Secretary Steve Rattner recently said, “We’re all paying the price for overstimulating this economy.”
The President has blamed everyone but himself for this crisis he created. At first, he denied that inflation was occurring. He then dismissed it as “transitory.” In December, after finally admitting inflation is real, he said we had reached “the peak of this crisis.” Yet prices still did not let up. When Russia invaded Ukraine, the President quickly tried to shift blame for all our economic pain onto Vladimir Putin, even though inflation long predated the war in Ukraine. Today, Mr. Biden still cannot bring himself to admit his own spending and energy policies are the problem. He insists that his agenda has left “no one behind” and is “changing people’s lives.” His willful blindness is costing us all.
Curbing Inflation Will Be Painful
Last month’s inflation reading of 8.6 percent sent shockwaves through our economy. The stock market lost over 800 points in a day, causing more uncertainty for 401ks and savings. In response to this news, the Federal Reserve announced it will raise interest rates by 0.75 percent – the largest increase since 1994. Fed Chairman Jerome Powell also signaled an additional 0.75 percent jump could be in store next month. This would undoubtedly cause more economic stress in the near term. Although raising interest rates has always been a last resort, President Biden may have left the Fed with no good options after flooding our economy with reckless spending.
Our nation faced a similar inflation crisis in the late 1970s. In the last two years of the Carter presidency, prices were rising by double digits across our economy, with gas prices up 35 percent each year. Some Americans feared the dollar would get so weak they would have to bring bags full of cash to go grocery shopping. Thankfully, we did not reach that point. Inflation was stopped but at a heavy cost. In 1980, Federal Reserve Chairman Paul Volcker took the extraordinary step of raising interest rates to 20 percent. This caused a painful economic downturn and hurt job growth, but it ultimately brought inflation down. It was not until 1983, under the Reagan tax cuts, that our economy began a full recovery.
Biden Should Focus on Helpful Solutions
President Biden should take stock of the damage his policies have caused. If he is serious about giving Americans a “fighting chance,” he needs to work with Republicans to unleash American energy production, which would lower gas prices. He should also lift regulatory burdens on job creators and help Republicans preserve the 2017 tax cuts, which actually increased revenue and which have kept our nation competitive globally. He needs to learn what we know well in Mississippi: that big government is the problem, not the solution.
Sen. Roger Wicker’s Weekly Report is provided by the Senator’s office