America’s inflation crisis is even worse than you think

Unless you’ve been living under the world’s largest rock for the past six months, you know America is experiencing unprecedented inflation.

The consumer price index (CPI), the most popular index that measures inflation, shows that the price of consumer products and services jumped 6.2 percent October 2020 to October 2021 – the fastest 12-month increase in nearly 31 years.

CPI data for Bureau of Labor Statistics reveal that virtually every aspect of the US economy has been affected by inflation. The price of milk has increased by 17 percent. Egg prices are up 42 percent. The prices of energy services have increased by more than 11 percent.

But as bad as the widely publicized CPI inflation figures are, a closer assessment of key industries reveals that for millions of families, especially those looking to buy higher-priced items like a car or home, inflation it is having an impact even worse than the economy. The figures in the upper line of the CPI show this.

For example, Kelley Blue Book reported in October that the median price of a new car has increased by $ 5,000 since late 2020. A new motor vehicle now costs an average of $ 45,000 – the highest figure ever recorded.

Even car brands that were once considered a bargain by consumers have become too expensive for many working families. the average cost of a new Honda in September 2021 was $ 35,310, and the median selling price of a car produced by Toyota was $ 40,778.

Perhaps worst of all is the rising cost of new homes. In the fourth quarter of 2019, just before the start of the coronavirus pandemic, the median sales price of a home sold in the United States it was $ 384,600. In the third quarter of 2021, the median sales price of a home was $ 454,300, almost $ 70,000 more.

It is difficult to underestimate the historical nature of these figures. Median home sales price in the second quarter of 2021 was 17.65 percent higher than it had been 12 months earlier, the third-largest year-over-year increase on record since 1963 and the largest price increase since 1973. almost 50 years.

While daily increases in the cost of milk, gasoline, eggs, meat, and other items are significant and are undoubtedly putting pressure on Americans’ wallets, the biggest inflationary pressures are coming from the US. parts of the economy with higher prices. goods and services.

The inflationary crisis is driving millions of Americans out of the housing market and making it virtually impossible for many families to buy vital items like a car. As a result, key markets are cooling at a time when economic growth is desperately needed. Car sales, for example, fell 7.3 percent from August to September.

It is vital for consumers to remember that even if inflation soon matches historical norms, the damage that is occurring now will not be reversed without a strong deflationary period, an unlikely outcome that would invite its own set of economic woes.

The reasons for the incredibly high amounts of inflation that have occurred in recent months are not a mystery. The decision by governments to impose widespread coronavirus lockdowns, coupled with more than a year of government handouts and disincentives to work, created vast supply chain problems that will take months, if not years, to fully resolve.

Additionally, decisions made by the Federal Reserve, Congress, and the Biden and Trump administrations to print and distribute trillions of dollars over the past year and a half are causing the cost of everything to rise, an outcome that was predictable and avoidable.

If the Federal Reserve and the federal government had chosen to target aid to those who really needed it during the height of the pandemic, instead of making the financial equivalent of heaps of cash dropped from helicopters throughout the economy, much of it today. inflationary crisis could have been prevented.

Instead, the Biden administration and Democrats in Congress seem committed to redoubling this failed approach, an argument best illustrated by Biden’s monstrosity “Build Back Better.”

If approved in its current form, the Build Back Better plan would require the government to spend $ 1.75 trillion in a host of government programs and numerous unnecessary handouts, increasing the United States budget and requiring hundreds of billions of additional dollars in print, regardless of whether the Democrats are successful in accomplishing their plan to impose tax increases that eliminate the employment in companies.

The Biden administration and the Democratic-controlled Congress are slowly but surely causing the United States to commit economic suicide. America’s only hope of reversing course is a strong and widespread reaction against the irresponsible policies that created the current crisis in the first place. A good place to start would be a total rejection of the Build Back Better bill that is now being considered in Congress.

Justin haskins ([email protected]) is the director of the Stopping Socialism Center at The Heartland Institute and the co-author, with Glenn Beck, of the forthcoming book, “The big reboot: Joe bidenJoe Biden Michael Flynn Says From US: ‘We Have To Have A Religion’ White House Tries To Change Messages On Economy Biden Expresses ‘Great Concern’ Over Belarus-Poland Border Crisis MORE and the rise of 21st century fascism. “

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