Are You Better Off Than You Were a Year Ago?

[Geee]

Issues & Insights

By Most Standards the Answer is No

 

Turn the clock back a year. President Joe Biden, just weeks after taking office, was pitching his American Rescue Plan, saying that “It’s big, and it’s bold. And it’s a real answer to the crisis we’re in.”

Biden promised that the $2 trillion spending spree would “generate more growth, higher incomes, a stronger economy, and our nation’s finances will be in a stronger position.” We’d be at “full employment by the beginning of next year.”

Well, here it is. Next year. And nothing Biden promised has come to pass. By most measures, in fact, we’re worse off than we were before Biden “rescued” us.

The economy is growing more slowly than expected. Incomes are being eaten up by rising inflation. Optimism is below where it was during the height of the pandemic in 2020. The nation’s finances are in far worse shape, with the national debt up $1.8 trillion since Biden took office. We’re still nearly 3 million jobs shy of the previous peak. Oh, and COVID deaths under Biden now top 430,000 – more deaths than happened while Donald Trump was president.

Let’s go through some of the specifics of how we’re worse off than a year ago.

Inflation is up. The year-over-year inflation rate in January was 7.5%. A year ago it was 1.4%. For the second half of 2021, prices jumped 6%, a rate higher than any year since Jimmy Carter’s stagflation gripped the nation.

This is definitely making people worse off than last year. An analysis by Moody’s Analytics – the same outfit that praised Biden’s rescue plan a year ago – finds that inflation is costing households an average of $250 a month. 

“A lot of people are hurting because of high inflation,” Moody senior economist Ryan Sweet told the Wall Street Journal. “$250 a month – that’s a big burden. It really hammers home the point of ‘what is the cost of inflation?’”

Wages and disposable income are down. Biden keeps claiming that wages are climbing. And they are. But inflation is climbing faster. As a result, after adjusting for the rapid rise in prices, average weekly wages are down 3% from a year ago.