Inflation is forcing Americans to spend more of their hard-earned dollars over the past two years.
The rate of inflation has become a common refrain the past couple of years. While experts are hopeful that skyrocketing inflation may be a thing of the past, data shows that men and women around the nation continue to dig deeper into their wallets than they did before.
Mark Zandi, the Chief Economist for Moody’s Analytics Economics, recently tweeted that “the high inflation of the past 2+ years has done lots of economic damage. Due to the high inflation, the typical household spent $202 more in a July than they did a year ago to buy the same goods and services. And they spent $709 more than they did 2 years ago.”
To be sure, the high inflation of the past 2+ years has done lots of economic damage. Due to the high inflation, the typical household spent $202 more in a July than they did a year ago to buy the same goods and services. And they spent $709 more than they did 2 years ago.
Even with this analysis, Zandi expressed optimism with the future of inflation and the American economy, writing, “The trend lines look good, and suggest inflation is set to moderate further. Vehicle prices will decline more, so too will electricity prices, and the growth in the cost of housing will slow further.” However, he warned that his “biggest worry is the jump in oil prices, which bears close watching.”
The news about the current state of inflation comes as President Joe Biden heralds the anniversary of the Inflation Reduction Act, which was executed in an attempt to address the runaway inflation that has, at times, crippled certain sectors of the American economy. Biden posted, “One year ago, I signed into law one of the most significant laws ever enacted: the Inflation Reduction Act. Emerging from a deadly pandemic and doubts about America’s future – we delivered. Looking forward, not back. Taking on the special interests and winning.”
One year ago, I signed into law one of the most significant laws ever enacted: the Inflation Reduction Act.
Emerging from a deadly pandemic and doubts about America’s future — we delivered.
Arizona officials also weighed in on the significance of the law’s passage, sharing their perspectives on the progress (or lack thereof) since its execution. Phoenix Mayor Kate Gallego wrote, “Clean-energy jobs, a more secure water supply, and lower utility bills. These are just a few ways the Inflation reduction Act is delivering for Phoenix families since it became law one year ago today.”
Clean-energy jobs, a more secure water supply, and lower utility bills.
These are just a few ways the Inflation Reduction Act is delivering for Phoenix families since it became law one year ago today. Thank you, @SenMarkKelly, for your work to get it across the finish line! pic.twitter.com/ekiNtefi7z
Republican Senator Anthony Kern responded to Gallego, saying, “More left political lies. Has anyone’s electric bills, water bills, gas bills, and food bills been lowered??”
More left political lies.
Has anyone's electric bills, water bills, gas bills, and food bills been lowered??
While the White House touts the success of “Bidenomics,” American families are drowning in debt, especially on credit cards. The latest data from the Federal Reserve Bank of New York show Americans ended the first half of this year with over a trillion dollars of credit card debt for the first time ever. At the same time, credit card interest rates are at record highs, pushing many Americans to the financial brink.
How we got here is a lesson in basic economics, something the Biden administration has willfully ignored.
Contrary to the White House talking points, President Joe Biden did not inherit a “reeling” economy and inflation was not “already there.” When he entered the Oval Office, the economy was growing at a $1.5 trillion annualized rate and inflation was 1.4 percent, comfortably below the Federal Reserve’s target inflation rate. But Bidenomics changed all that.
In just a year and a half, Mr. Biden managed to deliver two consecutive quarters of negative economic growth (a recession). Moreover, inflation reached 40-year highs, with prices rising in a single month about as fast as they rose in the entire year before Biden took office.
This is the bitter fruit of the Bidenomics tree. The seed was trillions of dollars in excessive government spending; it was watered with trillions of borrowed dollars and fertilized by the Fed’s printing trillions of dollars. The results are fast-growing prices, a sluggish economy, and family budgets getting squeezed.
Since Mr. Biden took office, prices have risen about 16 percent, but average hourly wages have risen less than 13 percent, and average weekly hours have been cut back. That has left the average American with an effective pay cut of about 5 percent, and families have been using credit cards to make up for that lost purchasing power.
In just two and a half years, outstanding credit card balances have exploded 34 percent, but it gets worse—much worse. The Fed has been steadily raising interest rates to combat the very inflation which it helped cause. That has pushed up borrowing costs, especially on credit cards; their average interest rate is now at an all-time high.
The combination of large balances and high interest rates is a financial death spiral for many American families. When the financing charges on your credit card bill are equal to or greater than what you can afford to pay each month, it becomes impossible to pay down your balance. You are effectively trapped in debt. On top of the higher cost of living, you’re now paying higher financing charges too.
And it’s not just credit card debt that has exploded during Bidenomics. Consumer spending during the last two years has been partly fueled by higher balances for auto loans and mortgages, the latter of which has grown almost $2 trillion in just two and a half years.
Mr. Biden’s false promises of a student loan bailout along with a moratorium on student loan payments have also encouraged young people to take on additional debt for schooling and not pay those loans back. In fact, instead of using the savings from the moratorium to responsibly pay down their debt, most borrowers have been further increasing consumer spending.
American families going deeper into debt is a hallmark of Bidenomics, so much so that even members of Mr. Biden’s administration are beginning to say the quiet part out loud. Vice President Kamala Harris recently claimed that most Americans would go “bankrupt” if they had a $400 emergency expense.
While there is no evidence to support Ms. Harris’ claim, her statement is an indictment of the administration’s economic agenda. For most Americans, a much more likely scenario than bankruptcy is that they would have to put that emergency expense on a credit card—which many families have already had to do.
The squeeze on Americans’ family budgets will continue until we clean up the federal budget. If Washington doesn’t cut trillions of dollars in spending, the bills will keep piling up, both at the Treasury, and in your mailbox.
E.J. Antoni is a contributor to The Daily Caller News Foundation, a public finance economist at The Heritage Foundation, and a senior fellow at Committee to Unleash Prosperity.
Who wouldn’t want more money in their pocket? As Bidenflation continues to crush the American people—and in particular the people of Arizona—our elected leaders should be looking for every way possible to provide relief.
Just look at the anti-tax mood among Arizona voters this past November. They rejected Prop 310, which would have increased the statewide sales tax by 0.1% to fund fire districts throughout Arizona. They voted down ill-conceived transportation taxes in Pinal County and Kingman. And they passed Prop 132 to protect against future tax increases. That should be proof enough that Arizonans want to ensure that their hard-earned dollars stay in their wallets.
Now, a new bill recently passed by the Arizona Senate would do just that…
America’s response to the COVID-19 pandemic was possibly the most consequential public policy blunder in our history.
The enormous costs included $5 trillion or so in unproductive federal spending, inflation, reduction in our standard of living, and permanent economic damage that will be felt for generations to come.
There was massive learning loss and the specter of loved ones dying alone. The incidence of depression and drug addiction skyrocketed. Businesses were shuttered while many Americans seemingly lost their work ethic.
What happened? The short answer is that we panicked and listen to “experts” who vowed we could halt this virus if we were willing to sacrifice enough.
At first, with imperfect information around a deadly new phenomenon, projecting a worst-case scenario and drastic measures to prevent it made sense. However, more data and experience with the virus soon tended to support a strategy of containment (“stop the spread”).
Still the decision makers at the World Health Organization (WHO) and the National Institutes of Health (NIH), doubled down on their zero-COVID based recommendations. Lockdowns ensued. We scoffed at cost-benefit analysis. “If only one life…” and “in an abundance of caution…” became the guiding standards of policymaking.
The American people mostly went along with it. Why wouldn’t they? They were provided little awareness of alternate approaches.
Once the narrative had been established that eradication was the only permissible strategy, opposing viewpoints were excluded to a degree any Third World dictator would have envied.
Dissenters were shamed and censored. Professional reputations were attacked. Dr. Fauci informed us that “I am the science” and thus all who disagreed were “science deniers.”
Consider the case of Dr. Jay Bhattacharya, a Professor of Health Policy at Stanford. He also directs Stanford’s Center for Demography and Economics of Health and Aging and is a research associate at the National Bureau of Economics Research. So, the doc isn’t exactly an empty suit. He was also a co-author of the Great Barrington Declaration (GBD), signed now by thousands of medical scientists and practitioners, which advocated for “focused protection” against COVID.
Since COVID is dangerous only to a relatively small proportion of the population, it was argued that the greatest efforts should be in protecting people most at risk, the chronically ill and elderly. This would focus resources where they do the most good, saving lives and money.
Agree or not, there is nothing looney about this notion that one-size-fits-all doesn’t make sense for COVID-19. It was mainstream common sense, advocated by highly qualified, non-political scientists.
Yet the blogosphere and leading scientific opinion channels exploded with vitriolic denunciations. The authors were accused of promoting infections among the young to achieve a cruel herd immunity strategy. The claimed the GBD was promoting a wholesale return to our pre-pandemic lives—that they were encouraging fringe groups who distrust health officials and prioritizing individual preference above public good.
None of it was true, but to the social media tyrants, that didn’t mean that Dr. Bhattacharya should be vigorously debated. It meant that he must be threatened and silenced.
We just recently learned that he was indeed censored and intentionally shadowbanned by Twitter. His account was tagged with a label of “Trends Blacklist.” He was censored before he tweeted a single message.
He had violated no rules. He spread no “misinformation.” He only defied the approved consensus. He was silenced by the mob at Twitter, none of whom had anything like his knowledge or experience.
The GBD authors were right, of course. None of the isolations, lockdowns, or school closures affected the eventual course of the virus. We received virtually no benefit from the massive self-inflicted harm.
It’s ironic in our supposedly modern, enlightened age that dogma won out over science. That is, we based our societal decisions on knowledge rooted in deemed authority, not the open inquiry of the scientific method.
We paid a big price for listening to the Fauci’s of the world with their refusal to balance benefit with cost. Dr. Fauci bragged of not caring about the cost of his demands.
They convinced our leaders to spend money we don’t have in a vain attempt to achieve the impossible.
Bad idea. We can’t afford to let it happen again.
Dr. Thomas Patterson, former Chairman of the Goldwater Institute, is a retired emergency physician. He served as an Arizona State senator for 10 years in the 1990s, and as Majority Leader from 93-96. He is the author of Arizona’s original charter schools bill.
In January, Arizona’s 55th legislature will convene with new challenges. Republicans managed to maintain slim majorities in both chambers, but what can we possibly accomplish with a Democratic Governor? It will certainly be more difficult to get pro-liberty legislation signed into law, but there are still tangible goals worth fighting for. We just have to be realistic and narrow down our agenda.
The Republican Liberty Caucus of Arizona has published its top five priorities for the 2023 legislative session. These are pragmatic ideas to advance the principles of individual rights, limited government, and free markets, even under a Democratic Governor. Several of these goals were included in Senate President Warren Petersen’s plan to help Arizonans combat rising prices, which we fully support.
The first priority is the same for every legislative session: kill the bad bills. Moderate legislators will be looking for ways to compromise with our new Governor by promoting legislation that will expand the size and scope of government. Our primary focus will be to fight these bills in the legislature, preventing them from reaching the Governor’s desk.
Our second priority is one of Senate President Petersen’s priorities: to repeal the municipal rental taxes on residential properties. These are taxes imposed on residential rental properties by cities and towns. The cost of housing has skyrocketed in recent years, especially in Arizona. As many municipalities sit on massive surpluses, they should be looking for ways to cut taxes and alleviate the cost of housing. Sadly, few cities have done this. It’s time for the legislature to change Arizona statute by revoking the cities’ authority to tax residential rental properties. Rep. Shawnna Bolick ran a bill last session to repeal this tax, and it passed the House with bipartisan support. With support from multiple Democratic lawmakers, this is something Governor Hobbs might sign.
Priority number three is also one of Senate President Petersen’s priorities: eliminate the food tax. One of the reasons why cities are seeing record high revenues is because inflation forces people to spend more. This means more sales tax revenue. Food is a necessity and a tax on food is a regressive tax that especially hurts the middle and lower class who are already struggling with inflation. Some Republicans might object to a repeal of food sales taxes because sales taxes are less invasive than income or property taxes. While we agree a reduction to income or property taxes would be preferable, we should be looking to cut any and all taxes wherever there is a consensus for it. By amending statute to prohibit municipalities from taxing food, we would compel local governments to address the rising cost of living by cutting an unnecessary, regressive tax. We can try to pass this as a normal bill, but if the Governor vetoes it, we could also pass it as a referral that goes to the ballot for the voters to decide, bypassing the Governor’s pen. High inflation has decreased the appetite for taxes, as seen by the rejection of Proposition 310 and many failed bonds and overrides. If placed on the ballot, a repeal of the food tax would likely pass.
Our fourth priority is to prohibit the Governor, or any state agency, from shutting down private businesses under the guise of an emergency declaration. Last session, Governor Ducey signed Sen. Warren Petersen and Rep. Leo Biasiucci’s bill to ban cities and counties from shutting down private businesses. Now we must ensure that the state government cannot impose lockdowns. The Governor would surely veto this bill, but the legislature can instead pass a measure to put this on the ballot in 2024. Once again, this would allow the legislature to go around the Governor. It’s unclear if the voters would pass this measure, but with a leftist Governor, we must do all we can to reign in the powers of the executive branch. We cannot allow our private businesses to be shut down by petty tyrants.
Finally, priority number five is a criminal justice reform that would allow simple drug possession offenses to remain undesignated, allowing the court to designate the offense a misdemeanor upon completion of probation. This is not soft on crime because it would only apply to first-time, victimless drug possession charges, and the offense would still be designated a felony if the individual fails to complete probation. By giving people a chance to avoid a permanent felony, this would be a huge incentive for first-time drug offenders to complete probation and become productive, law-abiding citizens. The end result would be reduced recidivism and less taxpayer spending. This bill was sponsored by Rep. Neal Carter last session, and it passed the House unanimously before getting stuck in the Senate. With new committee chairs and bipartisan support, this reform has a real chance at passing.
This is not an exhaustive list, but these are the top five priorities of the Republican Liberty Caucus of Arizona heading into 2023. This legislative session will look different, but there is always work to be done to advance liberty. We must remain vigilant as we fight to keep Arizona a free and prosperous state!
