Biden’s unconstrained federal spending – $2 trillion pushed for needless COVID and unemployment checks, $2 trillion for “infrastructure” (only five percent “roads and bridges”), a total $6 trillion for 2022 – is creating Carter-like inflation pressures that will cripple seniors.
Biden and congressional Democrats spent more in the first two months of his administration than any president in recent history and now propose to spend a “record” $6 trillion in fiscal 2022 – creating mass debt, federalizing sectors from education to energy, and driving prices straight up.
The Wall Street Journal soberly reported, “debt held by the public would rise to 111.8 percent in 2022, surpassing the level seen in the wake of World War II,” and “debt would continue to rise in the following years, reaching 117 percent of GDP in 2031.” Democrats would finance this mass debt with higher taxes; corporate bumped from 21 to 28 percent, capital gains from 23.8 to 43.4 percent, with other add-ons. See, Biden Unveils $6 Trillion Spending Plan;9 Things You Need to Know About Biden’s “Infrastructure” Spending Plan.
The net effect of unconstrained federal spending and higher taxes is easy to predict. Post-COVID growth will taper, and markets grow jittery. More paper money will chase less real wealth, causing the dollar’s value to fall and inflation to pick up smartly. This is already happening. See, e.g., U.S. consumer prices soar again and push CPI inflation rate to 13-year high.
Spin it any way you like, but inflation now approaches Carter levels, which triggered market fear, upward spiraling inflationary expectations (and union demands), downward spiraling employment (and recession), or “stagflation.” Last month saw the highest inflation number in a dozen years. See, e.g., United States Inflation Rate.
History and logic converge. Higher taxes will break corporate investment, hiring, wage, and income growth. When companies do not have money to invest, hire and grow – they do not do those things. Consumption (people buying things), employment, and corporate returns will all fall as real incomes, your purchasing power, and job security all decline.
Biden does not want to admit the reality, but there is no free lunch.
These things will sting the middle class and especially seniors on fixed incomes. While job worries will grow and corporate taxes get passed to consumers with less purchasing power, the real hit will be on Americans with variable interest rate loans – including mortgages and credit cards – and those living month to month on fixed incomes – chiefly seniors.
How many seniors will suffer from Biden’s inflation gamble – the idea that Democrats can buy votes with federal giveaways before people catch on?
In 2021, at least 65 million Americans get Social Security. Nine out of ten over 65 receive Social Security. Half of all married couples – and two-thirds of unmarried seniors – rely on Social Security for at least 50 percent of their income, while a quarter of all married and half of all unmarried seniors depend 90 percent on this fixed income. See, e.g., Fact Sheet SOCIAL SECURITY.
In short, Biden’s inflation game is about to nobble, in many cases cripple, the primary income source for fixed-income seniors. Seniors who want to preserve their due take note. But it gets worse.
Not only will seniors on fixed incomes have less purchasing power – as inflation explodes – but Biden’s immediate and out-year budgets threaten to accelerate Social Security’s insolvency.
Without getting too deep on numbers, the May 2020 Trustees Report showed combined Old-Age and Survivors’ Insurance (OASI) and Disability Insurance (DI) depleted by 2035, without accounting for COVID’s calamity and Biden’s predictable “stagflation.” The next report will likely reflect a shorter solvency fuse and may miss declining payroll taxes from a stumbling Biden economy. See, e.g., What the 2020 Trustees’ Report Shows About Social Security; https://www.forbes.com/sites/bobcarlson/2020/04/22/the-pandemic-reduces-social-securitys-solvency/.
Bottom line: Biden’s spending games the system, pretending to create money by fiat – to win votes in 2022.
Reality is harsher. Biden’s inflation will sting the middle class and cripple seniors living on fixed incomes. It will ramp up mortgages, credit cards, and variable interest payments.
All the while, tax increases will slow the economy. Biden is banking on Americans thinking federal money is free – it is not, never has been. It costs, and we are about to pay.
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