WASHINGTON—New economic numbers show that the average American has lost the equivalent of $4,200 in annual income under the Biden administration because of inflation and higher interest rates.
Heritage experts calculated this shocking number based on different sets of data. Consumer prices have risen 12.7% since January 2021, significantly faster than wages, so that the average American worker has lost $3,000 in annual purchasing power. Further, as the Federal Reserve implements tighter monetary policy to reduce inflation, interest rates are rising. Higher rates have in turn increased borrowing costs on mortgages, vehicle loans, credit cards, and more. The higher interest rates and borrowing costs have effectively reduced the average American’s purchasing power another $1,200 on an annualized basis.
EJ Antoni, research fellow in regional economics with The Heritage Foundation’s Center for Data Analysis, released the following statement Thursday evening on his findings:
“Simply put, working Americans are $4,200 poorer today than when Biden took office. This financial catastrophe for American families is the direct result of a president and Congress addicted to spending our money, combined with a Federal Reserve compliantly enabling this addiction by printing more dollars. Washington recklessly spent trillions of dollars it did not have and paid for it with newly printed money, causing rampant inflation that has destroyed people’s purchasing power and jeopardized Americans’ financial futures.
“Instead of correcting course over a year ago when inflation began rising, the Biden administration and Congress continued the profligate spending spree and the Fed let the printing presses roll. Many Americans have taken on additional debt to cope with higher living costs. Now, the Fed is finally fighting inflation, which is pushing up interest rates and increasing financing costs. Rates on all kinds of consumer debt are rising. Mortgage interest rates have doubled since Biden took office, greatly increasing Americans’ monthly payments.
“We are in vicious spiral, but it’s one of Joe Biden, the Democrat-controlled Congress, and the Fed’s own making.”
BACKGROUND: Under former President Trump’s low-inflation economy, the average American worker’s real annual earnings increased by $4,000. That has been completely wiped out in about a year and a half under the Biden administration. Despite seeing the failure of various policies, such as paying people more to stay home than remain employed, the Biden administration has doubled down on these mistakes so that families can no longer afford to live in Biden’s America.