By: Senator Roger Wicker
High spending has raised prices and hurt savings
The Labor Department recently issued a grim report confirming that the cost of living in America is skyrocketing. Americans were already facing higher prices at the gas station, in the grocery store, and throughout their daily lives as they emerged from the pandemic. But instead of getting better, the trend has gotten worse. Prices rose 5.4 percent from a year earlier, the biggest increase in 12 months since the 2008 financial crisis. Worse still, US producers sold their products at prices 7.3 percent higher than a year ago. year, indicating that we are rushing toward inflation.
Mississippi is being hit especially hard. The Labor Department reports that in our region, the price of goods rose 7.3 percent. Mississippi residents are now paying much more for a tank of gas, a gallon of milk, and basic necessities.
Biden’s stimulus leads to a higher cost of living
This massive price hike can be largely traced to the decision by Congressional Democrats to spend $ 1.9 trillion on unnecessary “COVID relief” in March. This decision was made directly after the Republican-led Congress passed five COVID relief bills in 2020 that were negotiated and passed with overwhelming bipartisan support. Unlike those bills, the Democrats’ package was excessive, misdirected, and encouraged many workers to stay home with a government check rather than rejoin the workforce. It also saturated the economy with freshly printed money, leading to our current situation where there are more dollars chasing fewer goods.
We warned our Democratic colleagues in March that their spending plans would overheat the economy. Even Larry Summers, a former Democratic adviser who served under Presidents Obama and Clinton, said this unnecessary stimulus could cause inflation. Although we are almost out of the pandemic, the Federal Reserve continues to print money to keep up with spending by Democrats in Congress. In fact, since the pandemic began, the amount of dollars in our economy has increased by a staggering 31 percent.
This flood of cash from Washington is causing US earnings, bank accounts and 401k plans to shrink as part of the economy. Loss of purchasing power makes it harder for Americans to pay for a home, support a growing family, and simply put food on the table. It can take months and even years for earnings to catch up with inflation. And when they do, many Americans can find themselves pushed into a higher tax bracket, paying more taxes and earning less net pay. This is the hidden tax that many Americans will feel due to President Biden’s inflationary policies.
Democrats ask for more trillions
President Biden and his party leaders should be sober about these recent events. Rising prices in our economy are an early warning that the Democrats’ big spending schedule will invite runaway inflation, as well as burdening our children with ever-increasing debt.
Unfortunately, Senate Majority Leader Chuck Schumer recently announced plans for a $ 3.5 billion spending bill that will overshadow any bill that Congress has passed. Senator Schumer hopes to impose this legislation through the Senate with a very fine partisan line vote. If passed, this legislation would throw our economy into a more inflationary spiral, further eroding household savings and increasing the cost of living. I urge Senate Democrats not to follow this reckless path.