{"id":561316,"date":"2021-06-11T17:36:47","date_gmt":"2021-06-11T21:36:47","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=561316"},"modified":"2021-06-11T17:36:52","modified_gmt":"2021-06-11T21:36:52","slug":"heres-how-inflation-hurts-americans-pocketbooks","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/heres-how-inflation-hurts-americans-pocketbooks\/","title":{"rendered":"Here\u2019s How Inflation Hurts Americans\u2019 Pocketbooks"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">12<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fheres-how-inflation-hurts-americans-pocketbooks%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=561316&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div><img decoding=\"async\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2021\/06\/GettyImages-1264127452-1200x800-1.jpg\" class=\"ff-og-image-inserted\" \/><\/div>\n<p><span>American inflation is reaching record levels.<\/span><\/p>\n<p><span>The Department of Labor revealed on Thursday that year-over-year inflation hit 5% in May \u2014 \u201cthe largest 12-month increase since a 5.4-percent increase for the period ending August 2008.\u201d<\/span><\/p>\n<p><span>In addition to hikes in food and energy costs, inflation in the categories of used vehicles, transportation, and commodities respectively <\/span><a href=\"https:\/\/www.bls.gov\/news.release\/pdf\/cpi.pdf\"><span>rose<\/span><\/a><span> by 29.7%, 11.2%, and 6.5% in the past twelve months. Indeed, as the United States emerges from COVID-19 and the lockdown-induced recession, price levels are climbing far faster than usual in both <\/span><a href=\"https:\/\/www.dailywire.com\/news\/breaking-april-inflation-surged-to-highest-level-in-decades-as-biden-set-to-unveil-6t-budget\"><span>April<\/span><\/a><span> and <\/span><a href=\"https:\/\/www.dailywire.com\/news\/breaking-monthly-inflation-again-passes-economists-expectations-highest-annual-rate-in-more-than-12-years\"><span>May<\/span><\/a><span>.&nbsp;<\/span><\/p>\n<p><span>While it is typical for price levels to rise after a pronounced recession, the Federal Reserve is not backing down from its commitment to an <\/span><a href=\"https:\/\/www.dailywire.com\/news\/sitting-on-a-time-bomb-deutsche-bank-sounds-alarm-warns-of-growing-inflation-in-u-s-economy\"><span>aggressive<\/span><\/a><span> quantitative easing policy through 2023. In other words, the central bank of the United States has promised to stimulate the economy by increasing the money supply \u2014 primarily through purchasing $120 billion in government <\/span><a href=\"https:\/\/www.cnbc.com\/2020\/12\/16\/fed-decision-december-2020-fed-commits-to-keep-buying-bonds-until-the-economy-gets-back-to-full-employment.html\"><span>bonds<\/span><\/a><span> every month \u2014 for the foreseeable future.<\/span><\/p>\n<p><span>Likewise, the Biden administration \u2014 including Treasury Secretary Janet Yellen, who served as Chair of the Federal Reserve from 2014 to 2018 \u2014 is <\/span><a href=\"https:\/\/www.dailywire.com\/news\/despite-skyrocketing-inflation-janet-yellen-will-keep-pushing-for-biden-spending-agenda\"><span>proposing<\/span><\/a><span> trillions of dollars in new spending through legislation such as the <\/span><a href=\"https:\/\/www.dailywire.com\/news\/nonpartisan-economists-say-bidens-infrastructure-plan-will-decrease-economic-growth\"><span>American Jobs Plan<\/span><\/a><span> and the <\/span><a href=\"https:\/\/www.dailywire.com\/news\/bidens-american-families-plan-is-far-from-a-new-deal-economic-boon\"><span>American Families Plan<\/span><\/a><span>.&nbsp;<\/span><\/p>\n<p><span>\u201cIf we ended up with a slightly higher interest rate environment,\u201d explained Yellen in defense of President Biden\u2019s new social programs, it would \u201cactually be a plus for society\u2019s point of view and the Fed\u2019s point of view.\u201d Upon her confirmation, Yellen told Treasury Department employees that they should be willing to use fiscal policy to \u201caddress inequality, racism, and climate change.\u201d<\/span><\/p>\n<p><span>For the first time in four decades, Americans will have to conceptualize and grapple with the reality of high inflation \u2014 especially its effects on their pocketbooks.<\/span><\/p>\n<p><span>Simply put, inflation is the erosion of a currency\u2019s purchasing power over time. If, for example, inflation remains at 2%, then the value of every dollar \u2014 both in new earnings and previous savings \u2014 drops in value by 2% over the course of a year. As long as breadwinners see increases in earnings that match inflation \u2014 namely, a 2% wage increase \u2014 inflation has no meaningful effect on their lives.&nbsp;<\/span><\/p>\n<p><span>However, with the United States observing inflation to the tune of 5%, it is less likely that workers will see wage increases that will allow them to continue the same lifestyle.&nbsp;<\/span><\/p>\n<p><span>Since every dollar will be 5% less valuable by May 2022 if the current rate holds, those who hold the dollar will effectively become <\/span><i><span>poorer <\/span><\/i><span>due to inflation. For instance, an item that cost $100 in May 2021 would cost $105 in May 2022; unless the consumer saw wage increases from $40,000 to $42,000, he will have to spend a higher proportion of next year\u2019s earnings to enjoy the same item.<\/span><\/p>\n<p><span>This reality is called the <\/span><i><span>inflation tax<\/span><\/i><span> \u2014 and it allows policymakers to fund spending without directly raising taxes.<\/span><\/p>\n<p><span>The effect is more pronounced upon poorer families, who have more of their wealth saved in the form of dollars \u2014 whether in cash, checking accounts, or savings accounts \u2014 than wealthier families, who are more likely to hold retirement accounts, property, or other assets which accrue interest or increase in value over time. Indeed, low income earners typically spend a greater percentage of their wages on food, fuel, and other basic necessities \u2014 the very same items that are rising in cost thanks to Secretary Yellen and the Biden administration.<\/span><\/p>\n<p><i><span>The views expressed in this piece are the author\u2019s own and do not necessarily represent those of The Daily Wire.<\/span><\/i><i><span>The Daily Wire is one of America\u2019s fastest-growing conservative media companies and counter-cultural outlets for news, opinion, and entertainment. Get inside access to The Daily Wire by becoming a <\/span><\/i><a href=\"https:\/\/www.dailywire.com\/subscribe\"><i><span>member<\/span><\/i><\/a><i><span>.<\/span><\/i><\/p>\n","protected":false},"excerpt":{"rendered":"<p>American inflation is reaching record levels.The Department of Labor revealed on Thursday that year-over-year inflation hit 5% in May \u2014 \u201cthe largest 12-month increase since a 5.4-percent increase for the &#8230;<\/p>\n","protected":false},"author":1,"featured_media":1897421,"comment_status":"close","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-561316","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/561316","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=561316"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/561316\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1897421"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=561316"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=561316"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=561316"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}