Hard working Americans continue to suffer from historically high levels of inflation caused by the Biden administration’s out-of-control spending and opposition to domestic energy production. Soon after the Bureau of Labor Statistics released the Consumer Price Index (CPI) report for September, which confirmed inflation is accelerating and isn’t going away anytime soon, President Joe Biden claimed “If Republicans win, inflation’s going to get worse.”
Such a reckless claim demonstrates the president’s fundamental misunderstanding of the problem his policies have caused … or how to solve it. (RELATED: LEWANDOWSKI: ‘It’s The Economy, Stupid!’ — Democrats Are In For A Rough November)
Overall inflation was up another 0.4% in September, or 8.2% year-over-year. Even the less volatile measure of “core” inflation increased by 0.6% in September for a 12-month increase of 6.6%. This is the highest increase in core inflation in 40 years and shows that inflation is broad-based and continues to spread throughout the economy.
Americans are well-aware that food prices have increased dramatically. Food prices rose 0.8% in September alone and have increased 11.2% in the last 12 months. This is the highest year-over-year increase in the United States since 1979. Cereals and bakery items are up 16.2%, dairy items are up 15.9% and fruits and vegetables are up 10.4%.
American workers also suffered another month of declining purchasing power last month. These decreases have become all too customary under the Biden administration’s policies, and in just the past year, purchasing power fell by 3.3%. Since the beginning of the Biden administration, the average worker has paid a $2,500 inflation tax. Lower-income Americans and senior citizens on fixed incomes are particularly vulnerable to rapid price increases.
Ongoing inflation has led the Federal Reserve to engage in some of the most aggressive monetary policy most Americans have ever seen. That’s bad news for Americans whose investments are being destroyed and whose dreams of owning a home or starting a business are being delayed. The Wall Street Journal reports that 30-year fixed-rate mortgages now average more than 7.1% compared to just 3% a year ago.
For a homebuyer borrowing $250,000, the monthly interest and principal payment has increased from approximately $1,050 per month to a staggering $1,680 per month.
The only thing keeping the headline inflation rate from hitting another 40-year high is that energy prices declined slightly in September. That appears to be changing quickly, and not in a good way.
The energy prices in September’s inflation report were recorded before the OPEC+ announcement that the cartel will cut production by two million barrels per day starting in November. A market correction also looms around the corner when the administration’s releases of oil from the strategic petroleum reserve will come to an end. Because it refuses to expand domestic production, the Biden administration will be left with few real options to lower prices at the pump.
The announced reduction of 2 million barrels per day, combined with the long overdue termination of releases from the strategic reserve is already assessed to send oil prices skyrocketing. Goldman Sachs recently forecasted that oil prices will likely reach $110 per barrel.
The 4.9% decline in gasoline prices in September is but a temporary reprieve, and it is highly probable that a national average of $5.00 per gallon will once again crush Americans’ wallets.
Oil and gasoline are only one piece of a more eerie picture. The coming winter should be of significant concern. Natural gas prices are driven by global factors, and with the ongoing Russian invasion of Ukraine, Europe is facing a potential economic catastrophe driven by extreme energy volatility. This would further raise prices for heating American households.
The Biden administration’s embrace of big government socialism has wrought the worst economy in 40 years. Rather than trusting the American people’s ingenuity, the administration’s centralization of authority and special interest cronyism have devastated our Nation’s citizens. Government debt is now more than $31 trillion, and forecasters estimate deficits of more than $1 trillion per year in the future.
Dependency, debt, and demagoguery are not the foundation of a strong economy. Only by returning to an America First economic approach led by renewed energy independence can the American people once again realize the shared prosperity we enjoyed a few short years ago.
Sam Buchan is a former Director for International Economic Policy on the National Economic Council and is currently the Director of the Center for Energy and Environment at the America First Policy Institute.
Michael Faulkender is a former Assistant Secretary for Economic Policy at the Department of the Treasury and is currently a Senior Fellow at the America First Policy Institute.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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