Higher prices, crushing debt? Bidenomics just gets better and better!

Remember back in 2021 when the Biden administration, let by Treasury Secretary Janet Yellen, guaranteed to the American people that inflation was “transitory” and would soon pass?

Yellen has since switched her tune and now says bringing down inflation is Joe Biden’s top priority. If that is the case, he and his administration need to refocus. Whatever they’re doing is not working, and working Americans are suffering for it.

These numbers are devastating for working-class Americans, and even the corporate media is starting to recognize the problem.

The latest Producer Price Index, which shows the changes in prices that manufacturers pay to suppliers — in other words, the appetizer to next month’s consumer inflation rate — came in hotter than expected on Tuesday at 2.2% for the 12 months ending in April. This gain was higher than the downwardly revised number of 1.8% for the 12 months ending in March.

On a monthly basis, prices rose 0.5% in April, much faster than the 0.3% increase anticipated by mainstream economists, driven primarily by services and gas.

The economic news did not get any better on Wednesday, when the Consumer Price Index, the measure of inflation at the consumer level, came in at 3.4%, which was in line with expectations. Core inflation, which excludes food and energy, was 3.6%, showing that inflation remains sticky.

Inflation is additive. The inflation rate in April 2023 was 4.9%, meaning that prices today, in aggregate, are 8.3% higher than they were in April 2022. Overall, prices are up more than 18% since Biden took office in 2021.

Last, when inflation slows, prices do not go down; they just go up more slowly.

These numbers are devastating for working-class Americans, and even the corporate media is starting to recognize the problem.

Consumer credit card spending fell off a cliff in March, with the total outstanding revolving debt rising by only $152 million, versus an expected $15 billion. While credit card debt remains at a record $1.1 trillion, Americans can no longer afford to run up debt, so they have stopped spending. And it is little wonder with credit card interest rates just below 25%.

Americans have depleted their savings, with the estimated $2.1 trillion in pandemic-era savings now gone. As a result, more Americans have fallen deeper into debt. In the first quarter of 2024, total household debt rose to a record of $17.69 trillion, driven mostly by an increase in mortgage balances and auto loans.

And increasing debt is leading to increased payment delinquencies. Nearly 9% of credit card balances fell into delinquency over the past year, per the Federal Reserve Bank of New York.

In 2023, nearly 18% of middle-income Americans missed a mortgage, rent, car, or other debt payment, according to the Motley Fool.

Millennials are increasingly seeing their cars face repossession for lack of payment.

Foreclosure activity on homes continues to be at record highs, and approximately 65,000 people backed out of signed contracts to purchase a home in December 2023.

Sadly, people are even giving up food, with 39% of Americans skipping meals to help make ends meet.

While working Americans struggle, the Biden administration continues to pursue economic and social policies that augment rather than fight inflation.

Biden, who falsely claims that inflation was at 9% when he assumed office (it was at 1.4%), continues to pump trillions of dollars into the economy — an economy that needs to cool off, not heat up. Billions for student debt forgiveness, green energy, so-called infrastructure projects, and a proposed fiscal year 2025 budget of $7.3 trillion will do nothing but contribute to inflation, as more and more dollars chase the same number of goods and services.

The key question is what the Federal Reserve will do with interest rates. All economic indicators point to the Fed holding rates for the rest of the year, if not raising them by at least a quarter-point.

Commenting on the April PPI, Federal Reserve Chairman Jerome Powell said he did not expect the Fed’s next move to be an interest rate increase, suggesting that rates will remain where they are.

The political pressure on Powell to cut rates before the November presidential election will be intense. Will he and the Fed’s board of governors have the courage to do the right thing for working Americans, or will they bow to the pressure and play politics with the nation’s economy?