The hits keep-a-coming for U.S. president Joe Biden, whose 2020 campaign promise to “Build Back Better” is running headfirst into the unintended consequences of its massive price tag.
On Friday morning, the U.S. Bureau of Labor Statistics (BLS) issued updated consumer price index (CPI) information showing yet another historic spike in inflation – i.e. a massive reduction in the purchasing power of U.S. currency due to the ongoing government-fueled expansion of the nation’s money supply.
According to the data (.pdf), CPI soared by 0.8 percent in November – pushing the year-over-year increase to 6.8 percent, the highest price increase on record since 1982. So-called “core” prices – which exclude food and fuel – are up 4.9 percent on a year-over-year basis, the biggest spike on record since 1991.
As I noted earlier this week, inflationary pressures and supply chain issues have served to hamstring economic growth and short circuit the Covid-19 “recovery.” And this squeeze is getting tighter during the holiday shopping season – a make-or-break period for hundreds of thousands of small businesses.
The recent price spike is more than three times the optimal rate of inflation – which has been set by the secretive Federal Reserve bank at 2 percent.
Why is it a good thing for prices to rise at a gradual clip? As I have previously noted, incomes have to be created from somewhere … and if the price of goods and services remains stagnant, then the paychecks of the workers producing these goods and providing these services is likely to remain stagnant as well.
For much of the administration of former president Barack Obama, inflation came in below this optimal level. The annual rate of inflation for 2016 averaged just 1.26 percent, while in 2015 it clocked in at a meager 0.12 percent. The two percent threshold was also missed in 2014 (1.62 percent) and 2013 (1.47 percent).
Under former president Donald Trump, CPI hit its targets in 2017 (2.1 percent) and 2018 (2.4 percent) but dipped just below the target rate in 2019 (1.8 percent). Last year, inflation registered just 1.2 percent thanks in large part to the Covid-19 shutdown.
The spike in prices has had severe political consequences for Biden, who has seen his approval rating among small business owners tank over the last few months. The only good news for the 46th president? His numbers are positively stellar compared to those of his vice president, Kamala Harris.
ABOUT THE AUTHOR …
Will Folks is the founding editor of the news outlet you are currently reading. Prior to founding FITSNews, he served as press secretary to the governor of South Carolina. He lives in the Midlands region of the state with his wife and seven children. And yes, he has LOTS of hats (including that Chicago Blackhawks’ lid pictured above).
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BANNER VIA: The White House