Concealing People's Economic Difficulties and Beautifying Inflation Data, [Perspective] American Economist: The US Government Hides Its Ears
American economist E J. Antoni
On September 22, local time, American economist E J. Antoni wrote an article in The Washington Times criticizing the US government for covering up its ears, embellishing inflation data, and concealing the economic difficulties of the people.
E. J. Antoni stated at the beginning of the article, "Inflation is like a thief at night, plundering American money for the past two and a half years. As inflation accelerates again, August saw its largest monthly increase in over a year, and the Biden administration is carefully selecting data to conceal the economic pain people are suffering. But numbers won't lie: 'Biden economics' causes American households to lose thousands of dollars annually.".
E. J. Antoni said that the newly released Consumer Price Index data from the US Bureau of Labor Statistics shows that prices have risen by about 17% since Biden took office. In August alone, prices increased by 0.8%. This may not sound like much, but if prices continue to rise at this rate every month, the annual inflation rate will reach 7.8%, and prices will double in less than a decade. The speed of price increases far exceeds the speed of wage increases. In addition, the increase in interest rates has also led to higher borrowing costs, especially for large commodities like houses. Now, the monthly supply of median priced houses is twice that of Biden's presidency. For the same house, a family needs to pay an additional $13000 per year.
During Biden's tenure, the inflation rate exceeded the annual growth rate of weekly income almost every month. The gap between nominal and actual wages is so significant that it now exceeds the average federal income tax burden of American workers. In other words, in terms of actual value, ordinary workers lose more wages due to inflation than federal income tax.
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E. J. Antoni said that the shocking inflation problem goes beyond that. The recent data released by the Federal Reserve Bank of New York shows that household net wealth reached a historic high in the second quarter of this year. But these data have not been adjusted for inflation rates, which have taken away trillions of dollars in wealth from the US population.
The actual net wealth of households decreased by about 5% compared to the end of 2021 and remained basically unchanged from the end of 2020. This means that all net household wealth generated in the past two and a half years has actually been transferred to the government through implicit taxation of inflation. If we consider today's employment data, which states that there are over 10 million more people than two and a half years ago, it is surprising. All of these increased incomes have not increased the true wealth stock, as it roughly equals the total losses suffered by people due to inflation during the same period.
E. J. Antoni criticized the Biden administration for covering up their ears, embellishing inflation data, and masking the economic difficulties faced by Americans. He said that the White House proudly claimed that the three-month average of core inflation had reached its lowest level in two years. But it ignores all other factors that are developing in the wrong direction. The core inflation rate remains more than twice the Federal Reserve's target of 2%. In addition, last year's monthly CPI data clearly showed that the inflation rate did not even trend towards 2%, but exceeded 3%. As energy prices continue to rise, this will lead to a rise in prices for the entire economy, putting further upward pressure on core inflation.
E. J. Antoni wrote at the end of the article, "In short, this problem will not disappear unless we control spending. When Congress reconvenes this week to discuss government spending for the next fiscal year, it is best for them to remember that their previous extravagance has fueled the inflation crisis we face today. Unless spending is cut, inflation will continue."
Responsibility
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