Pain in the Pocketbook
by US Senator John Thune
January 14, 2022
Year-over-year inflation reached 7 percent in December – its highest level in 40 years. That’s seven straight months in which inflation has been higher than 5 percent. As South Dakotans struggle to keep up with steep increases in grocery prices, fuel prices, and heating bills, this record-high inflation is taking a major toll on the pocketbooks of families and those living on a fixed income. Despite growing wages throughout 2021, Americans have now experienced a de facto pay cut as they watch their wage growth get eroded by rising costs.
Families aren’t the only ones on the receiving end of the inflation pain. According to the National Federation of Independent Business, high inflation is a top concern of small business owners across the nation, likely due to the fact that annualized inflation for wholesale goods increased by a staggering 9.7 percent, which affects business owners and families alike.
At its most basic level, inflation is created when there are too many dollars chasing too few goods in the economy. What we’re seeing today is a textbook example of it. When Democrats took office last January, inflation was at 1.4 percent. That was well within what most economists would consider to be an acceptable range – what’s commonly called the target inflation rate. And it could have stayed there had Democrats not decided to pass a massive multi-trillion-dollar government spending spree under the guise of COVID relief – passing it mere weeks after Congress had just approved a major COVID relief bill targeted toward actual COVID needs. That unnecessary government spending, of course, had serious economic consequences: a soaring inflation crisis with no clear end in sight.
Any level-headed person would think that the economic pain Americans continue to experience after months of rising prices would give Democrats pause. They would be wrong, though, because Democrats actually spent most of last year trying to double down on their reckless tax-and-spending strategy that helped lead to the inflation crisis we’re seeing today.
President Biden and congressional Democrats seem to believe that they can’t be bothered to pay attention to a real crisis – one that has real economic consequences for South Dakota families. Instead, Democrats in Washington are focused on passing their radical agenda that is full of heavy-handed and government-knows-best policies. I am hopeful that the shocking inflation numbers that were just released will resonate with Democrats and help redirect their attention to issues that are draining Americans’ pocketbooks.
It’s time for Democrats to recognize that families, small businesses, and our broader economy cannot afford any more reckless government spending.