The Biden Inflation Tax, Explained

Supposedly, 80 million plus of Americans voted for this guy, so, they shouldn’t complain about the massive reduction in real wages

The Biden Inflation Tax, Made Clear in One Chart

What is all this “Biden inflation tax” talk really about? What is the actual effect of inflation on the lives of real people?

Well, below is a chart that compares yearly wage and inflation rates for each month from 2017 through July of this year using Bureau of Labor Statistics data. Wage rates are in blue and inflation (as measured by the consumer price index) is in red. When blue is on top, as it was during the entire Trump administration, workers’ wages are beating inflation and their standards of living are improving. When red is on top, they’re not.

While President Biden claims that it is “indisputable” that his jobs plan “is working,” this chart unequivocally shows that it is not, at least not for American workers. Rather, inflation is surging, more than wiping out any wage gains those workers might have experienced.

Is this all Comrade Joe’s fault? No Many of the problems now were not that bad even during the height of COVID. Sure, used cars were getting scarce and the prices were rising, but, nothing like the last few months, which will continue for at least 3-4 months. Consider, a 3 year old Civic base model coming off lease with under 36k miles would have gone for around $16-17K. Now? Easily $19-20k. If you can even find one. Want a new car? Few dealers are negotiating. Most are at MSRP. Some are marking above MSRP (a big mistake, people will remember). A goodly chunk of what’s being sold new already has a name on it before it comes off the truck. There are lots in build status, that will arrive in late August and through September, with names on them. That’s not all Joe’s fault. Chips and mining isn’t on him. Or Trump. It’s on China for COVID19

So, why is inflation surging in the Biden era? One factor is an imbalance between supply and demand. Emerging from the pandemic, we are in a period of high demand boosted by unprecedented government largesse. Thanks to that largesse, in June of this year, personal savings were nearly $400 billion higher than in January of 2020. People have money and now they’re spending it.

But the pandemic disrupted production and order flow, hobbling supply chains. Simply, people were unable to work and businesses were unable to anticipate future demand. Bad policies that pay people more not to work than they can make with a job have exacerbated the supply chain disruptions. You can’t produce and deliver goods if you can’t find workers.

Trump worked to get people back to work. Biden has worked to pay people not to work. Comrade Joe and his buds in Congress are looking to dump enormous amounts of money into the economy, which reduces the power of purchasing and increases prices

It doesn’t take an economist to see the inflationary impact. Restaurant Business, an industry publication, recently ran an article bluntly titled “Yes, It’s OK to Keep Raising Prices.” That opinion isn’t limited to restaurants. In the Institute for Supply Management’s July report, 66.7% of service businesses said they are raising prices. In the National Federation of Independent Business’ monthly survey for July, 52% of respondents reported raising prices.

That 6.4% represents selling cars at MSRP vs negotiated discounts. May not seem a lot, but, even a $1,000 discount would save you $20 a month on a 5 year finance loan, and $30 a month on a lease. Lots of backend money from manufacturers is gone. Why would a company sell at a discount if supply is super limited? Oh, someone in Danville, Va, is offering a couple grand off? Go get it. Have fun when you find out what games they are playing (we’ve seen this before). I mentioned the TV I bought on July 11th. Best Buy increased the cost from $499 before $20 discount to $569 before a $40 discount from Sunday to Monday. Is this all Joe’s fault? No. But, he and his Congressional Comrades are doing all the can to make sure inflation continues. Will wages catch up? Doubtful.

 

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4 Responses to “The Biden Inflation Tax, Explained”

  1. est1950 says:

    It usually takes many years to get out from underneath policies that have created inflation.

    From huffpost:

    Jun 11, 2013 · U.S. inflation was fueled by rising energy prices between 1972 and 1979 linked to OPEC and instability in the Middle East. The public blamed Carter for high prices while Reagan benefited from their long decline after 1980.

    Notice they say ‘their long decline’ This is a historical trend. It often takes less to get to the 14 percent inflation under Carter….which I will agree was brought on by sources outside the USA’s control. Yet we know the BUCK ALWAYS STOPS WITH THE PRESIDENT…..so eat it Biden.

    Regardless of whose fault this current inflation is, Seniors and those disabled and on fixed and limited incomes are going to suffer horrendously over the coming decade because the government wants to lie to us about the real inflation numbers because of POLITICS.

    5 percent inflation. Hardly. Try 15 percent. Next year it will be 20 percent an they will say its only 3 percent. But these Dumb assed politicians, Actually they are not so dumb since most voter is not too smart, will almost always vote with their pocketbook and when you have to buy stuff and simply CANT because it does not exist or costs too much.

    2022 is shaping up really bad for the Democrats, but who really cares? The GOP get in office and they won’t be able to do anything unless they have 60 senators. They will just huff and puff and pretend they give a shit.

  2. Hairy says:

    The graph shows that Biden became POTUS on Jan 1 he didn’t
    The downward trend had already begun fortunately Biden was able to quickly reverse that downward trend within a few months
    Teach you must always always double check any data that you WANT to bieve

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