Government overspending, an activity that the Biden administration has taken to a new level, has sent the country into an inflationary spiral. Through trillions of dollars in COVID-19 relief programs, infrastructure spending, vote-buying student loan forgiveness programs, and a political “Build Back Better Agenda,” the White House has swamped the economy and decimated the purchasing power of consumers. We pay more and receive less for everything from energy to food.
According to the House Budget Committee, the average family of four pays about $1,143 more each month than at the beginning of 2021 for the same goods and services; This includes rising gasoline costs. Instead of changing course, President Joe Biden is telling voters that the private sector is to blame and that he has the answers. He is doubling down on it by proposing more stifling, job-killing regulations to “fix” the problem, regulations that will inevitably drive inflation to new heights.
Energy prices are a central component of inflation. If it costs more to ship goods, prices increase. However, the president began executing an anti-energy agenda within hours of taking the oath of office. Although prices were at record lows before he took office, by 2022, consumers were paying 50 percent more for gas, not surprising after energy leases were canceled and pipeline construction halted. and new regulatory burdens on energy exploration.
If supply is limited, prices will rise. But that hasn’t stopped Biden from blaming energy companies, the same companies that reduced prices to historic lows in relatively freer markets during the Trump administration. Now it threatens them with tax increases, which would be passed on and further increase costs for consumers.
The government’s fiscal irresponsibility has led to inflation and interest rate increases by the Federal Reserve, which in turn endanger the American dream of home ownership. The average 30-year fixed mortgage rate, which was below 3 percent at the end of 2020, has soared to nearly 8 percent. This means the average home buyer now needs to earn an extra $47,000 per year just to afford a home compared to four years ago. Some economists correctly argue that the “higher cost of money,” which is not measured in inflation rates, explains why people remain so upset about inflation despite its statistical decline.
Once again, the president shifts the blame, this time to his predecessor, by falsely claiming that the inflation rate was close to double digits when he took office.
Don’t forget renters, who, like homebuyers, are no better off now than before Biden’s wave of regulatory activists took hold. Between March 2020 and July 2023, the national median monthly rent increased from $1,614 to $2,038, an increase of 26.26 percent. Over the past four years, rental prices have increased by approximately 29.4 percent, with an average annual increase of about 7 percent.
Yet once again, the Biden administration found a convenient, private-sector scapegoat. It has unleashed the power of the Justice Department over RealPage, a US software provider that helps landlords determine market prices for their rental properties.
The existence of a company like this should not be controversial. Today, almost every industry uses a similar tool, from grocery stores to airlines, to make better decisions about pricing their inventory based on supply and demand. But the administration needs someone to blame, and there aren’t many other viable targets to shoot at.
It is nothing new to see politicians blaming others for their mistakes. Gone are the days of President Harry S. Truman’s philosophy that “the buck stops here.” Our current president would be more successful if he changed course, ending the spending orgy that is undermining the American family and restoring a sense of fiscal responsibility to the nation’s budget.
We are witnessing the success of doing just this in Argentina, a nation that has long struggled with inflation, excessive public spending, and the erosion of economic stability and the prosperity of its people. Newly elected President Javier Milei has imposed fiscal restrictions on the government, closing agencies and programs once considered sacrosanct. As a result, inflation has fallen, incomes have risen, and the nation is quickly becoming a shining light of economic prosperity after decades of darkness and decline. Its economy is growing for the first time in decades.
Part of Milei’s platform – focused on reducing the size of government, cutting unnecessary spending and implementing free market policies – offers a promising path toward economic revitalization. Perhaps now is the time for the United States to follow suit.
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