Most of us wish we had more money and capital, but sometimes we forget about those hanging on at the margins. If those struggling are invisible to us, that often says more about our deficiencies than their own. In a recent conversation, I am reminded that there are those, particularly in rural areas, who were missing doctor and physical therapy appointments because of high gas prices. The conversation recalls, and not in a good way, the tone-deaf belly laugh emanating from U.S. Secretary of Energy Jennifer Granholm when asked on Bloomberg Politics about her plan for rising gas prices.
A Rasmussen poll highlights our tendency to forget the poor, or more likely, our overall economic illiteracy. The poll, released October 27, reveals that 57% of Americans believe that inflation is a tax on the poor. Of course, inflation is a tax on everybody, but it disproportionally harms the poor. That 57% recognize that truth seems relatively low since it’s clear that massive government spending increases the currency in circulation and devalues our dollar. Of those on the other side, 23% disagreed with the statement, and 20% had no idea.
Those that aren’t sure about the question are at least honest with themselves.
Inflation is now surging at the fastest rate in 30 years. It hurts the poor the most because they spend the most significant share on necessities like food, fuel, energy, and clothing by the percentage of their income. Of course, poorer Americans have less access to markets and investment opportunities to fight back against the devaluing of the dollar. Because of a fixed income, they are primarily cut out from buying land, real estate, equities, and other potential hedges to protect against our government’s inflationary policies.
The middle class is hit hard, too. Savings, IRA, 401k investments can all be devalued by inflationary policies. That lessens one’s ability to retire and, in the end, creates greater government dependency. Simply put, inflationary policies through reckless spending and debt are theft. It steals the savings of Americans.
Amazingly, President Biden has claimed that pumping trillions more into the economy “will ease inflationary pressures.” Sane economists know that the opposite is true. A tighter monetary policy is what is needed. One way to tame inflation is raising interest rates, but the best prescription is to stop the insane spending.
The federal government is approaching $30 trillion in debt with no end in sight to the spending. One reason the Fed is reluctant to raise interest rates is that it is now severely limited in servicing the interest payments on $30 trillion. Printing money or devaluing currency makes it easier for the government to buy back bonds they’ve issued. Inflationary policies are good for governments and bad for the citizenry.
In a newly released poll by the John Locke Foundation, North Carolinians understand the pitfalls of inflation. A little over 76% of respondents across the state say inflation is a bigger problem than unemployment. That’s illuminating given that there isn’t a lot that is viewed more negatively in an economy than not being able to find work.
Promoting the common good is an essential core function of government. Furthermore, as the Gospels instruct, an even more ancient truth is caring for the “least of these.” Social justice warriors are quick to scream and demand that the government do more to alleviate the suffering of the poor, yet they pay little to no attention to the consequences of runaway spending and debt. Not only are inflationary policies the most harmful to the poor, but there is too little attention given to their adverse effects. This offers us another valuable lesson: Inflation not only makes us poorer, but it’s revealing the political partisanship of many so-called advocates for the poor.
Ray Nothstine is Carolina Journal opinion editor and a research fellow on Second Amendment issues at the John Locke Foundation. This article first appeared in the December print edition of Carolina Journal.