Since President Joe Biden took office, the 13.7% increase in prices and the steady rise in interest rates have cost each U.S. family an average of $7,400, according to a study published by The Heritage Foundation. EJ Antoni, a research fellow in regional economics at the foundation, explained to Fox News how Americans became poorer as a result of inflation:
Higher borrowing costs and declining real wages mean that the average family is effectively $7,400 poorer today than when Biden took office (...) That's more than a month's salary for many families and the equivalent of more than a 10% wage cut to the average family income.
Antoni also claimed that the Biden Administration's "excessive spending" to blame for the critical economic situation that citizens are experiencing:
Biden's presidency has been marked by excessive spending, borrowing and printing of money by the federal government. The result has been an appalling rise in inflation to levels not seen in 40 years.
"The hidden tax of inflation"
Despite the fact that the latest data from the consumer price index (CPI) shows that inflation has slowed to 6.5%, from its 40-year high recorded in June (9.1%), the cost of many staples has risen sharply since Biden's inauguration on January 20, 2021.
The study estimated that since Biden has been president, each household has lost an average of $6,000 in purchasing power and has paid an additional $1,400 due to the increase in debt due to the interest rate hikes by the Federal Reserve. The measure was implemented with the justification of cooling inflation in the shortest possible time. According to Antoni:
If you're wondering where the government got the trillions in extra spending over the last two years, they are taking it out of your hide right now through the hidden tax of inflation (...) Every time you put gas in your tank or groceries in your back seat, you're paying Biden's inflation tax.
Risk of default due to inflation
Inflation caused a price increase that had not been seen in the country for years. In addition, the economic crisis is causing more and more citizens to have problems paying for their future. The following items and services have increased the most during Biden's presidency:
- Eggs (+189.9%)
- Gas (+44.3%)
- Electricity (+21.3%)
- Transportation (+19.5%)
- Housing (+11.8%)
- 30-year fixed mortgage: current rate 6.48% (double the 3.22% rate from a year ago).
In addition, the national debt is rapidly approaching the $31.4 trillion ceiling, which could cause the country to default if the Administration fails to reach an agreement with the Republican majority in the House of Representatives.
"Stop wasteful spending"
Due to the situation, more than one-third of the country's households relied on credit cards or loans to purchase basic necessities in December 2022. Card interest rates reached a new record high of 19.14%:
Americans are increasingly relying on credit cards to move from paycheck to paycheck, resulting in higher levels of debt. Rising credit card balances in an era of rising interest rates is a path to insolvency (...) The average interest on credit cards is now around 20%, while half of Americans cannot afford to pay off their credit cards every month, and balances are growing at a 16% annual rate.
The Heritage Foundation is calling on conservatives in Congress to "stop wasteful spending, which is the root cause of both inflation and interest rate increases that affect Americans' finances."
