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During President Trump’s tenure in the White House, Americans were becoming wealthier, but while Joe Biden has lived at 1600 Pennsylvania Avenue, Americans have become $4,200 poorer on an annual basis. The rising cost of living has swamped any gains in wages for Americans. E.J. Antoni writes in the Washington Times:
The sailor’s lament “water, water everywhere, and not a drop to drink,” is reminiscent of how most Americans must feel today about their cost of living. For instance, there are plenty of homes and apartments across the country, but good luck finding one that’s affordable — inflation and interest rate hikes under President Biden have made that all but impossible.
Those two factors have made the average worker in America $4,200 poorer on an annual basis.
While White House officials are quick to cite the recent rapid increase in nominal wages, they somehow always leave out the fact that prices have risen even faster than wages, so that the average American’s larger paycheck actually buys less than it did before. The decline in real (adjusted for inflation) wages amounts to $3,000 per year.
In other words, the average worker in America has the equivalent of $3,000 less annually than he or she did in January 2021.
That decreased purchasing power represents the amount of money the federal government has confiscated through the hidden tax of inflation. People are demonstrably poorer because of it, and the government is using it to pay for trillions of dollars in deficits.
At one point, this inflation was totally ignored by Washington. The Biden administration and the Federal Reserve each insisted inflation was “transitory,” while they focused on issues like diversity. But now, the reality is so apparent that not even the ruling class in the Capitol can ignore it. In a belated attempt to fight inflation, the Fed has been pushing up interest rates.
While that will help reduce inflation over time, it has very quickly increased borrowing costs for Americans. As financing becomes more expensive, interest rates on mortgages, auto loans and credit cards are rising.
To add insult to injury, this further increases the cost of living for many Americans on top of the existing pain from inflation. The average worker is paying about $1,200 a year more in financing costs than when Mr. Biden took office. Once again, ordinary Americans are demonstrably poorer.
But it is important to remember that these numbers are just averages, and there must always be people above and below the average. Many Americans are faring even worse under Mr. Biden.
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