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(Daily Signal)—Make no mistake, the recent scourge of inflation and high interest rates has been a heist buried beneath economic jargon.
It has transferred a tremendous amount of wealth from hardworking Americans to the federal government.
The root cause of this disaster—reckless government spending and money-printing—should serve as a reminder that the federal deficit is the bank robber, the Fed is the getaway car driver, and you are the bank.
The past few years have seen consumer goods prices increase more than they had in the prior 30 years, while staggering price increases for construction materials have helped push homeownership out of reach for tens of millions of Americans.
This whirlwind of economic horrors comes from the combination of dramatically expanding government spending and a Federal Reserve willing to print enough money to paper over deficits with inflation.
Since the beginning of COVID-19, the annual level of federal spending has increased 45%, while the Fed has increased the money supply by 37%. Spending newly printed dollars in this way doesn’t magically create new goods and services. Instead, it has created the classic recipe for inflation; namely, more dollars chasing fewer goods and services.
This policy has inflated away nearly 20% of the purchasing power of the dollars in your paycheck and bank account.
Consumer goods price increases from October 1990 through January 2021 ran about the same as the increase from January 2021 through June 2022—roughly 14.3%. In other words, about 30 years of price increases thrown at households in less than a year and a half. To make matters worse, the increase in construction materials prices has been even larger, 26.4% since President Joe Biden took office.
No wonder house prices have soared over the past few years. While this does increase the equity of current homeowners, it also tends to lock people into their current homes and box young families out of owning a home altogether.
When the government runs a large deficit—as it is now with over $2 trillion in annual deficits—the Fed has a choice: It can print money to accommodate and soak up the new debt, creating a ticking time bomb of inflation, or it can leave the money supply unchanged and allow federal deficits to crowd out private access to funding, sending interest rates through the roof as money becomes scarcer.
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That leaves prospective homeowners without financing to buy a home and leaves businesses without investment capital to expand operations and create more jobs and goods and services.
With inflation rapidly climbing early in 2022, the Fed chose the latter. By pushing interest rates higher, the Fed didn’t alleviate the burden of high levels of government spending. It simply shifted the pain of the burden from runaway inflation to runaway interest rates, exacerbating the worsening financial picture for American families.
Mortgage rates soared from around 2.8% in January 2021, when Biden took office, to over 7.5% by October 2023. The Fed, on its own, couldn’t remove the burden from American families, it could only choose the type of burden.
That has left homeownership less affordable than it has been for generations. In January 2021, first-year interest costs on a typical new mortgage were around $8,200, or 16% of a full-time median worker’s annual pay when President Donald Trump left office. Today, it’s around $21,900, consuming more than 36% of a full-time median worker’s annual pay.
This bludgeoning will, tragically, have lingering effects as well. Today, a new mortgage on a median home will cost $320,000 more in just interest costs over 30 years than that of a mortgage from the end of 2020—a tremendous 257% increase in total mortgage interest costs.
If a new homeowner were able to, instead, keep this money and invest it over the same 30-year period, he or she could easily have more than $1 million more saved up for retirement.
The cost of the inflation and interest rate surges have levied a truly crushing burden on the backs of hardworking American families that will likely echo through generations to come.
Ten Election Irregularities That Have Occurred During Early Voting So Far
by Just The News
A variety of election irregularities – at least ten of them – have occurred across the country in the weeks leading up to Election Day, as some states have reported record-breaking turnout during early voting. The issues range from burning ballot boxes to fake voter registrations, with the close presidential…
Will Gold and Silver Prices Drop if Donald Trump Wins?
by Sponsored Post
It’s well-established among economists that if Kamala Harris wins the presidential election, gold and silver will likely shoot up in value. But what if Donald Trump wins? With his chances of victory increasing, should gold and silver owners sell now because values will drop during his second term? “Considering everything…
Election Skullduggery From Around the Nation
by PJ Media
To the surprise of no one with an ounce of grey matter, the 2024 election irregularities have begun, and, as expected, Democrats are responsible for almost of the malfeasance. Roughly 57 million Americans have already voted as of this writing, and I’ve found a K2-sized pile of evidence showing the…
P. Diddy ‘Kept Meticulous Records’ of His Parties and ‘Has Enough Dirt to Hang Expose of Hollywood’
by End Times Headlines
Sean “P. Diddy” Combs has had zero support from exes, including Jennifer Lopez and Cameron Diaz, who are in a major panic that he’ll drag them down by spilling sordid secrets about them if he winds up wearing a number, a source exclusively tells In Touch. “It’s not like they’ve…
What if Harris Gets Away With It?
by The Blaze
On Nov. 5, the American experiment in republican government may well come to an end. Over the past two decades, we have been living through a slow-motion communist revolution. Acts of political warfare have become commonplace. The most devastating has been the corruption of our election system. Having vilified Donald…
Here Are 8 Major Election Developments That Everyone Needs to Know About
by Michael Snyder
(The Economic Collapse Blog)—Can you believe that we are less than a week away from Election Day? Over 57 million Americans have already voted, and in some states more than half of the total expected vote is already in. So it may already be too late for a last minute…
Democrats Plan for Color Revolution
by Zero Hedge
It feels like there’s been a notable shift amongst Democrats in the last month. A recent sense of fatalism – or perhaps just simple resignation to what appears to be an inevitable Trump win. But as it turns out, there are some Democrats who have been preparing for this potential…
This Election Will Not Prevent the Coming Chaos
by Mike Pottage
(WND)—It seems the justice system is overwhelmed by criminal cases involving illegals, and this puts Americans at risk of being short changed by that system. What is even more astounding is the fact this crisis was created by the Democrat Party and was 50 years in the making, and yet…
House Republicans Warn White House It Could Have Violated Federal Law by Editing Biden’s Transcript
by Just The News
House Republican Conference Chair Elise Stefanik and House Oversight Committee Chairman James Comer accused the White House on Wednesday of publishing a “false transcript” of President Joe Biden’s controversial remarks on Tuesday, and warned doing so could have violated federal law. The president appeared to say that supporters of former…
As Christians Go To The Polls, We Must Remember: The Future Of Our Nation Is At Stake
by Harbingers Daily
In just a few days, our nation will hold one of the most consequential elections in decades. Voters will go to the polls on Tuesday, Nov. 5, to cast their ballots for the next president of the United States, as well as for many crucial congressional, state and local offices….
‘Fertility Call Checks’ — Chinese Communists Cold-Call Women Demanding Details About Their Periods
by Breitbart
Chinese women are flooding regime-controlled social media with complaints that local Communist Party officials are making phone calls to harass them into having more children, the South China Morning Post reported on Tuesday. The callers, government “grassroots” officials, sometimes demand details of their private lives including the timing of their…
Absolutely Massive Food Bank Demand in the Swing States of Pennsylvania, Michigan and Wisconsin
by Michael Snyder
(The Economic Collapse Blog)—The economy is the number one political issue in America right now, and it isn’t because the economy is doing well. The long-term economic collapse that I have been writing about for years is playing out right in front of our eyes, and it is going to have…