Dems’ Reckless Tax-And-Spending Spree Will Turbocharge Rising Inflation

As Prices Go Up Across The Economy, Democrats Want To Spend Staggering New Sums Of Money To Expand Government, Which, As Sen. Manchin Says, ‘Ignores The Everyday Reality That America’s Families Continue Pay An Unavoidable Inflation Tax’

SENATE REPUBLICAN LEADER MITCH McCONNELL (R-KY): “Wasting trillions and trillions of dollars on socialism would be a bad idea any day. But it is a uniquely bad idea at a time when American families are already being hammered by inflation and soaring costs. The government’s own data continue to indicate that the historic and painful inflation that began to take hold of our economy this spring isn’t going anywhere any time soon. The Chairman of the Federal Reserve acknowledged last week that rising prices have become an increasingly broad and structural problem. Last week, the Commerce Department reported that inflation has continued to rise faster than at any time since 1991. The Democrats’ inflation is so bad that even though the average American worker has gotten a multiple-percentage-point pay raise over the last year, their actual purchasing power has been cut. Their paychecks have gone up but their buying power has gone down. Wholesale inflation just marked the steepest 12-month jump on record. Even dollar stores are having to raise their prices! Just ask any American family about their last few trips to the supermarket, the gas station, or the toy store. Heaven forbid if they’ve had to participate in the housing market or the auto market anytime lately. And the Democrats are uniting around yet another multi-trillion-dollar taxing and spending spree? I guess our colleagues think they can inflate their way out of inflation. That is going to be an extraordinarily painful experiment for the middle-class families of this country.” (Sen. McConnell, Remarks, 10/04/2021)

SEN. JOE MANCHIN (D-WV): “Suggesting that spending trillions more will not have an impact on inflation ignores the everyday reality that America’s families continue pay an unavoidable inflation tax.” (Sen. Manchin, Press Release, 9/29/2021)


Americans Are Feeling The Pinch As Prices Rise Everywhere From Dollar Stores To The Grocery Store

“The buck has stopped at Dollar Tree Inc. The retailer, which sells nearly everything for a dollar in its namesake chain, plans to add more products at slightly higher prices, highlighting the pressure on companies to offset cost increases for a range of goods. Dollar Tree said it would start selling products at $1.25 and $1.50 or other prices slightly above $1 in some of its stores, expanding current tests selling items at higher price points as supply-chain snarls, a tight labor market and inflation push costs higher…. The addition of more above-$1 items is a response to rising costs and positive consumer feedback on tests so far, Michael Witynski, chief executive of Dollar Tree, said in an interview.” (“Dollar Tree to Sell More Items Above $1 as Costs Rise,” The Wall Street Journal, 9/29/2021)

  • “‘Price increases will continue until the middle of next year,’ predicted Gordon Haskett analyst Chuck Grom, pointing to a PepsiCo announcement this week that consumers can expect another round of price hikes in early 2022 on the company’s snacks and beverages. Indeed, a 10-ounce bag of Lay’s potato chips — Frito-Lay is owned by PepsiCo — cost $3.75 in August, 50 cents more than a year earlier at Dollar General stores in the Southwest, Grom said. The prices of other items have also ratcheted up at the discount chain, including a dozen 12-ounce Coca-Cola cans that cost $5.75 in August — 50 cents more than in 2020 — at its Southwest stores, and a half a gallon of 2 percent store-brand milk that now costs $4.49, 74 cents more than a year earlier, according to Grom. At Family Dollar stores in the Northeast, the 12-pack of Coke cost $6.90 in August, up $1.50, and a can of Folger’s coffee costs 85 cents more, $8.80, he found.” (“Real Cost Of Inflation To Average American Household: An Extra $175 A Month,” New York Post, 10/06/2021)

“Prices for meats and fish have led the way so far this year, with pork prices rising the most at an average of 5.4%.... For all of 2021, food-at-home prices are expected to jump between 2.5% and 3.5%, according to the USDA. That’s on top of a 3.5% increase last year, which was the biggest bounce since 2011…. Prices for meats, poultry and fish are projected to climb between 4% and 5% this year, with pork prices up between 6% and 7% and beef and veal up 5% to 6% as producers contend with higher feed costs, increased demand and an unreliable supply chain. (Wholesale prices for meat and poultry are expected to jump even more, in the range of 16% to 20%).” (“Grocery Prices Going Up In Pittsburgh, Across The U.S. As Supply Chain Gets Stretched,” Pittsburgh Post-Gazette, 10/04/2021)

“Price increases are being served up at restaurants, too. Food-away-from-home costs are predicted to rise between 3.5% and 4.5% this year, according to the USDA.” (“Grocery Prices Going Up In Pittsburgh, Across The U.S. As Supply Chain Gets Stretched,” Pittsburgh Post-Gazette, 10/04/2021)

“Home prices in virtually every major metropolitan area across the nation have hit a new record high … The latest edition of the S&P CoreLogic Case-Shiller Home Price Index showed that home prices increased 19.7% from a year ago in July, marking the fourth consecutive month of record growth in the more than 30-year history of the index. The separate 20-city index, which measures price appreciation among a group of major metropolitan areas across the country, saw a 19.9% year-over-year gain. ‘The last several months have been extraordinary not only in the level of price gains, but in the consistency of gains across the country,’ said Craig J. Lazzara, managing director and global head of index investment strategy at S&P DJI, in the report.” (MarketWatch, 9/28/2021)

And ‘Holiday Gifts Are Probably Going To Cost More This Holiday Season — A Lot More’

“Holiday gifts are probably going to cost more this holiday season — a lot more, according to a new report from Salesforce…. Salesforce estimates that price increases could reach 20% this holiday season.” (“Consumers Expected To Pay Up For Holiday Shopping,” Axios, 9/30/2021)


Even Mark Zandi, Democrats’ Favorite Economist, Says Inflation Is Already Costing The Median American Household ‘Another $175 A Month On Food, Fuel And Housing’

“For households earning the US median annual income of about $70,000, the current inflation rate has forced them to spend another $175 a month on food, fuel and housing, according to Mark Zandi, chief economist at Moody’s Analytics. ‘That’s the equivalent of a full grocery, electric or cellphone bill,’ Zandi said.” (“Real Cost Of Inflation To Average American Household: An Extra $175 A Month,” New York Post, 10/06/2021)


Inflation Indices Keep Hitting Highs Not Seen In Decades, As ‘Broader Inflation Pressures Begin to Show’

“A key measure of inflation hit a new 30-year high in August, the Bureau of Economic Analysis reported [October 1st]. The price index tracking consumer spending — the PCE price index — was up 4.3% over the 12 months ending in August. That was a faster pace than July's 4.2%. Inflation continued to run at the fastest pace since January 1991. Stripping out food and energy prices, which tend to be volatile, the inflation measure stood at 3.6%, where it has been since June. It remains the fastest rate of so-called core inflation since March 1991 and well above the Federal Reserve's target of 2%.” (“A Key Measure Of Inflation Surged To A New 30-Year High,” CNN Business, 10/01/2021)

“While many pandemic-driven price pressures are easing, broader sources of higher inflation are replacing them. That is the message from a slew of alternative inflation measures that strip away price changes due to idiosyncratic swings in supply and demand, and home in on longer-lasting pressures…. ‘All of these measures have moved from signaling price stability to signaling sharp accelerations in underlying inflation,’ said Brent Meyer, an economist at the Federal Reserve Bank of Atlanta. (“Broader Inflation Pressures Begin to Show,” The Wall Street Journal, 10/04/2021)

  • “The Atlanta Fed’s sticky-price CPI is also signaling a pickup in underlying inflation. The index includes only items whose prices change relatively infrequently, meaning that they react slowly to changes in economic conditions—for example, medical care and rent. ‘By tracking this measure, we think we’re getting something that’s telling us about…inflation a year or two or three out. And that measure is starting to move up,’ said the Atlanta Fed’s Mr. Meyer…. The significant increase in price pressure signaled by this and the other indexes is a potential worry, Mr. Meyer said.” (“Broader Inflation Pressures Begin to Show,” The Wall Street Journal, 10/04/2021)


Fed Chair Jerome Powell And Treasury Secretary Janet Yellen Are Now Finally Admitting That Inflation Could Be Higher And Last Longer Than Their Early Predictions It Would Be ‘Transitory’

FEDERAL RESERVE CHAIRMAN JEROME POWELL: “It’s also frustrating to see the bottlenecks and supply chain problems not getting better — in fact at the margins apparently getting a little bit worse… We see that continuing into next year probably, and holding up inflation longer than we had thought.” (“Fed Chair Powell Calls Inflation ‘Frustrating’ And Sees It Running Into Next Year,” CNBC, 9/29/2021)

“Treasury Secretary Janet Yellen cautioned Tuesday that inflationary pressures hitting the U.S. economy could last for a while. Coming less than a week after Federal Reserve Chairman Jerome Powell called inflation ‘frustrating,’ Yellen told CNBC that the various issues that have colluded to push up prices likely will pass though she’s not sure how long that will take.” (“Yellen Sees Inflation Staying Higher For The Next Several Months,” CNBC, 10/05/2021)


REMINDER: ‘[W]hen Americans Are Asked To Name The Top Economic Problem Facing Their Family Today, Rising Prices And The Cost Of Living Are The Overwhelming Top Issue’

An August Fox News poll found 86% of registered voters extremely or very concerned about inflation and higher prices. (Fox News Poll, 8/11/2021)

“[A]ccording to a new CNN poll conducted by SSRS … a rising share of Americans … say things in the US are going badly and that the economy is in poor shape, with increased worries about the coronavirus, the economy and crime. The new poll finds 69% of Americans say things in the country today are going badly …” (“Americans Turn Pessimistic Amid Concerns Over Economy And Coronavirus,” CNN, 9/10/2021)

“77% of Americans say they are worried about the state of the economy in their community, up sharply from 58% who said the same last summer…. [M]ajorities across parties express concern about the economy (70% among Democrats, 76% among independents), and overall assessments of the state of the economy have worsened since the spring. In April, 54% said the economy was in good shape, the first time that figure had crossed 50% since before the start of the pandemic, but now, only 38% say the economy is in good shape, with declining ratings coming from both Democrats and Republicans.” (“Americans Turn Pessimistic Amid Concerns Over Economy And Coronavirus,” CNN, 9/10/2021)



Related Issues: Economy