Tag: inflation

Record number of Americans are homeless amid nationwide surge in rent, report finds

A growing number of Americans are ending up homeless as soaring rents in recent years squeeze their budgets.

According to a Jan. 25 report from Harvard’s Joint Center for Housing Studies, roughly 653,000 people reported experiencing homelessness in January of 2023, up roughly 12% from the same time a year prior and 48% from 2015. That marks the largest single-year increase in the country’s unhoused population on record, Harvard researchers said. 

Homelessness, long a problem in states such as California and Washington, has also increased in historically more affordable parts of the U.S.. Arizona, Ohio, Tennessee and Texas have seen the largest growths in their unsheltered populations due to rising local housing costs. 

That alarming jump in people struggling to keep a roof over their head came amid blistering inflation in 2021 and 2022 and as surging rental prices across the U.S. outpaced worker wage gains. Although a range of factors can cause homelessness, high rents and the expiration of pandemic relief last year contributed to the spike in housing insecurity, the researchers found. 

“In the first years of the pandemic, renter protections, income supports and housing assistance helped stave off a considerable rise in homelessness. However, many of these protections ended in 2022, at a time when rents were rising rapidly and increasing numbers of migrants were prohibited from working. As a result, the number of people experiencing homelessness jumped by nearly 71,000 in just one year,” according to the report.

Rent in the U.S. has steadily climbed since 2001. In analyzing Census and real estate data, the Harvard researchers found that half of all U.S. households across income levels spent between 30% and 50% of their monthly pay on housing in 2022, defining them as “cost-burdened.” Some 12 million tenants were severely cost-burdened that year, meaning they spent more than half their monthly pay on rent and utilities, up 14% from pre-pandemic levels.

Keep reading

EVERYONE LOVES A GENEROUS GOVERNMENT UNTIL THEY HAVE TO PAY FOR IT

Governments, like individuals, can spend liberally with great generosity, or they can be frugal. Everyone receiving government money loves the state’s free-spending generosity, as it is “free money” to the recipients.

But there is no such thing as truly “free money,” a reality discussed by Niccolo Machiavelli in his classic work on leadership and statecraft, The Prince, published in 1516. In Machiavelli’s terminology, leaders could either pursue the positive reputation of being liberal in their spending (not “liberal” in a political sense) or suffer the negative reputation of being mean, i.e. miserly, tight-fisted and frugal.

Machiavelli pointed out that the spending demanded to maintain the reputation for free-spending liberality soon exhausted the funds of the state and required the leader to levy increasingly heavy taxes on the citizenry to pay for the state’s largesse.

Once we examine this necessary consequence of liberal spending, it turns out the generous government is anything but generous, as it is eventually forced to impoverish its people to support its spending.

It is the miserly leader and state that is actually generous, for it is the miserly leader / state that places a light burden on the earnings and livelihoods of the citizenry.

As Machiavelli explained, taxes and the inflation that comes with free spending both rob everyone, while the state’s generosity is a political process that necessarily distributes the largesse asymmetrically:

If he is wise he ought not to fear the reputation of being mean, for in time he will come to be more considered than if liberal, seeing that with his economy his revenues are enough, that he can defend himself against all attacks, and is able to engage in enterprises without burdening his people; thus it comes to pass that he exercises liberality towards all from whom he does not take, who are numberless, and meanness towards those to whom he does not give, who are few.

The profligate state and leader fail, for their resources are squandered.

We have not seen great things done in our time except by those who have been considered mean; the rest have failed. A prince, therefore, provided that he has not to rob his subjects, that he can defend himself, that he does not become poor and abject, that he is not forced to become rapacious, ought to hold of little account a reputation for being mean, for it is one of those vices which will enable him to govern.

Machiavelli understood that the positive reputation generated by profligacy decays as quickly as solvency. Everyone loves getting “free money” from the state until the bill comes due: the decay of purchasing power (i.e. inflation), higher taxes and fees, and the ever-increasing burdens of interest to be paid on soaring state debts that squeezes out all other spending.

And there is nothing wastes so rapidly as liberality, for even whilst you exercise it you lose the power to do so, and so become either poor or despised, or else, in avoiding poverty, rapacious and hated. And a prince should guard himself, above all things, against being despised and hated; and liberality leads you to both. Therefore it is wiser to have a reputation for meanness which brings reproach without hatred, than to be compelled through seeking a reputation for liberality to incur a name for rapacity which begets reproach with hatred.

Keep reading

White House: Economy ‘Exceptionally’ Good and People Like Their Finances, But Don’t Feel Confident Due to COVID, War

On Monday’s broadcast of CNBC’s “Squawk Box,” White House National Economic Council Director Lael Brainard reacted to negative poll numbers on the economy by stating that “the economy is performing exceptionally well” but “people have been through a very challenging few years between the pandemic, and then the oil price spikes associated with Russia’s war. It’s going to take a while for them to feel really confident,” and most people “feel like their personal finances are better now than they were before.”

Co-host Andrew Ross Sorkin said, “Speak to this, though, because I think there [are] a lot of folks who have been waking up to headlines of poll results over the weekend, as it relates to Bidenomics versus, frankly, Trumponomics and where he stands — the president that is — compared to where…the former president stands in terms of how people are thinking about the economy and how, frankly, unhappy they remain about the economy.”

Brainard responded, “Look, if I look around the world, I don’t think there’s a leader out there who wouldn’t rather have the economic record that President Biden has today. We have been growing, 3% over the past year. We’ve had unemployment down below 4% for 21 months in a row. Real incomes are growing. Wealth — this is remarkable — wealth is up 37% for the median household since before the pandemic. And we’re growing faster and have lower inflation than any other advanced economy in the world. So, the statistics, I think, are very strong. Now, people have been through a very challenging few years between the pandemic, and then the oil price spikes associated with Russia’s war. It’s going to take a while for them to feel really confident, but if you look at surveys, 70% of Americans feel like their personal finances are better now than they were before. We’ve still got to work on kitchen table economics, there are still a lot of Americans sitting around their kitchen tables with costs of medicine, pharmaceuticals that are still too high, and we’re working on that.”

Keep reading

Why Is Halloween Candy So Expensive? Sugar Protectionism.

There ain’t no such thing as free candy, not even on Halloween—as anyone who has stocked up in advance of Tuesday’s holiday can attest.

Candy prices have jumped over 7 percent since last year and are up over 21 percent since October 2021, according to inflation data from the Bureau of Labor Statistics. Even in an environment where everything is getting more expensive, candy prices have climbed even faster than the overall rate of inflation for groceries and other home goods.

The main culprit is rising prices within the supply chains for America’s candy makers—and, specifically, rising sugar prices. Much of America’s supply of the sweet stuff comes from Mexico, where a dryer-than-normal summer meant a below-average sugar crop, Barron‘s reports. The New York Times spreads the blame a bit wider: Everything from high fertilizer prices (thanks to the Russian invasion of Ukraine) to hotter, dryer weather all around the world that affected sugar crops in Asia, Central America, and West Africa.

There is, however, one major factor that the Times ignores entirely: America’s sugar policies.

The series of subsidies and tariffs that the federal government uses to artificially inflate sugar prices in the United States cost consumers between $2.5 billion and $3.5 billion every year, according to a timely Government Accountability Office (GAO) report released today. Those protectionist policies aren’t the cause of the recent spike in sugar or candy prices, of course, but prices would absolutely be lower without them.

The so-called “sugar program” administrated by the federal Department of Agriculture “creates higher sugar prices, which cost consumers more than producers benefit, at an annual cost to the economy of around $1 billion per year,” the GAO concludes. No matter what happens to cause global sugar prices to fluctuate, Americans have consistently paid higher prices over the past 20 years:

Those higher prices get baked—quite literally—into the cost of everything from Milky Ways to Sour Patch Kids. And, as the GAO also points out, this is a classic case of concentrated benefits for a special interest that results in huge, but very diffused, costs for everyone else: “Because the program guarantees relatively high prices for domestic sugar, sugar farmers benefit significantly, and sugar farms are substantially more profitable per acre than other U.S. farms.”

Keep reading

Ticking Time-Bomb: Food Inflation Is Crushing Millions Of Low Income Americans

In 1906, Alfred Henry Lewis stated, “There are only nine meals between mankind and anarchy.”  The sentiment was expressed right on the heals of a banking crisis which led to the Panic of 1907.  The event was widely blamed on a liquidity crunch, and this same crisis was used as a rationale for the creation of the Federal Reserve Bank in 1913-1916.  Of course, it is the central bank and its ability to generate fiat money from thin air (unbacked liquidity) that has led the US to the stagflationary disaster we face today.  The “solutions” offered by establishment elites are often worse than the problems they are supposed to solve.  

The total inflationary damage done to Americans consumers since 2020 varies according to who you ask.  Stats from the Federal Reserve and government are muddled in a series of creative mathematics in order to make the situation look much better than it is.  CPI is not a valid indicator of true inflation given it is watered down with over 80,000 items and services, and many of them are not necessities for the common US household.  If we look only at necessities like housing, food and energy, the economic picture looks increasingly bleak.

Food, as Alfred Lewis noted, is particularly vital to civil cohesion.  The human body can in fact survive up to three weeks without a meal, but the vast majority of people in the first world are not acclimated to such conditions and might just panic after one or two days without sustenance.  

The potential for this scenario might sound exaggerated to those in a higher income bracket, but it’s important for these people to understand that a 25%-50% increase in food costs for them is not the same as a similar increase for people on a low or fixed income.  For example, food price increases for the average middle-class to upper-middle-class households amount to around 11% of their annual income in 2023.  However, for people in the low income bracket, food costs now amount to 31% of their annual income.  That’s a pile driver to the wallet.

Keep reading

NY Times’ Paul Krugman says ‘inflation is over’ — if you exclude food, gas and rent

Paul Krugman’s assertion that “the war on inflation is over” if you exclude food, energy, shelter, and used cars is being mocked online.

The Nobel Prize-winning economist and New York Times columnist posted the comment on his X social media account on Thursday.

“The war on inflation is over,” Krugman wrote in the caption, adding: “We won, at very little cost.”

Krugman attached a graph titled “CPI ex food, energy, shelter and used cars” that showed a declining rate stretching from 7% in January of last year to slightly below 2% in September.

The reaction on X to Krugman’s post was scathing, with critics noting that the Labor Department’s consumer price index (CPI) — the most widely used by economists to gauge prices faced by consumers — factors in those day-to-day living expenses.

“This is fantastic news for all Americans who don’t need food, a place to live, or fuel & electricity,” wrote Tim Murtaugh.

Keep reading

Can’t Afford Groceries In Biden’s America? Wall Street Journal Says Just Don’t Eat!

As many Americans struggle to put food on the table, The Wall Street Journal proposed an idea this week: Instead of Biden taking responsibility for his destructive public policy, you should just skip breakfast.

Titled “To Save Money, Maybe You Should Skip Breakfast,” the article analyzed three popular breakfast foods — eggs, juice, and cereal — and offered explanations for why they cost significantly more since last year. According to the Journal, eggs are up a whopping 70 percent, frozen orange juice is up more than 12 percent, and cereal is up 15 percent since just one year ago.

Why the crippling increases? The explanations were as plentiful as they were diverse: avian flu, bad weather, citrus disease, dead chickens, and Vladimir Putin.

Global food supply includes a myriad of liabilities and moving parts, and of course, a drop in supply will play in role in rising prices. But the Journal neglected to mention perhaps the most important contributor to Americans’ economic woes: Biden’s apparently limitless federal spending.

Keep reading

Distract, Divide and Conquer: The Painful Truth About the State of Our Union

Step away from the blinders that partisan politics uses to distract, divide and conquer, and you will find that we are drowning in a cesspool of problems that individually and collectively threaten our lives, liberties, prosperity and happiness.

These are not problems the politicians want to talk about, let alone address, yet we cannot afford to ignore them much longer.

Foreign interests are buying up our farmland and holding our national debt. As of 2021, foreign persons and entities owned 40.8 million acres of U.S. agricultural land, 47% of which was forestland, 29% in cropland, and 22% in pastureland. Foreign land holdings have increased by an average of 2.2 million acres per year since 2015. Foreign countries also own $7.4 trillion worth of U.S. national debt, with Japan and China ranked as our two largest foreign holders of our debt.

Corporate and governmental censorship have created digital dictators. While the “Twitter files” revealed the lengths to which the FBI has gone to monitor and censor social media content, the government has been colluding with the tech sector for some time now in order to silence its critics and target “dangerous” speech in the name of fighting so-called disinformation. The threat of being labelled “disinformation” is being used to undermine anyone who asks questions, challenges the status quo, and engages in critical thinking.

Middle- and lower-income Americans are barely keeping up. Rising costs of housing, food, gas and other necessities are presenting nearly insurmountable hurdles towards financial independence for the majority of households who are scrambling to make ends meet. Meanwhile, mounting layoffs in the tens of thousands are adding to the fiscal pain.

The government is attempting to weaponize mental health care. Increasingly, in communities across the nation, police are being empowered to forcibly detain individuals they believe might be mentally ill, even if they pose no danger to others. While these programs are ostensibly aimed at getting the homeless off the streets, when combined with the government’s ongoing efforts to predict who might pose a threat to public safety based on mental health sensor data (tracked by wearable data and monitored by government agencies such as HARPA), the specter of mental health round-ups begins to sound less far-fetched.

The military’s global occupation is spreading our resources thin and endangering us at home. America’s war spending and commitment to policing the rest of the world are bankrupting the nation and spreading our troops dangerously thin. In 2022 alone, the U.S. approved more than $50 billion in aid for Ukraine, half of which went towards military spending, with more on the way. The U.S. also maintains some 750 military bases in 80 countries around the world.

Keep reading

Inflation Used To Squeeze The Middle Class. Now It’s Hitting The Poor The Hardest

The primary burden of inflation has shifted from middle class to low-income households thanks to a shift in the spending categories hardest hit by price hikes, according to a study published Wednesday by the Federal Reserve Bank of New York.

At the onset of rising inflation in the spring of 2021, middle-income households, defined as those earning between $50,000 and $150,000 per year, bore the brunt of inflation as they purchased more used cars and gasoline than other demographics, according to the New York Fed. However, as the cost of gas falls and the price of food and housing surges, lower-income households, defined as those earning less than $50,000, now face higher effective costs — roughly 0.3 percentage points higher than average — since they spend a larger portion of their income on food and housing than middle and high-income households.

“As of December 2022, the bottom 40 percent have the highest year-on-year inflation rate of the three groups, and the inflation rate of the middle-income group is below the national average,” the report reads. “It is likely the case that the same rate of inflation represents a greater welfare loss for lower-income than higher-income households because of the former’s lower capacity for substituting to less expensive goods, greater liquidity constraints, and larger marginal utility of real income.”

Keep reading