America's Talking - Episode 26: Report claims inflation costs American families $3,500 in one year

Episode Date: December 17, 2021

Inflation causing Americans to doubt Biden on economy, polls show. Producer prices spike highest level on record at 9.6%, signaling higher inflation. Report: Inflation costs American families $3,500 in one year. Senate votes to raise debt ceiling by $2.5 trillion. Congress passes $770 billion defense bill, allows discharge over vaccine refusal. Support this podcast: https://podcasters.spotify.com/pod/show/america-in-focus/support Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome to America in Focus, powered by thecentresquare.com. I'm Cole McNeely. Coming up, I'll be filming in for executive editor of the center square, Dan McAulb, while DC reporter Casey Harper and I will dive deep into some of the top stories of the week. Coming up right after this on America and Focus, powered by thecentresquare.com. Hi, this is Chris Krug, publisher of the Center Square. Our team produces the nationally read and recognized news stories at thecentersquare.com. the country's fastest growing, nonprofit, nonpartisan, state-focused news and information site.

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The date is December 17th, 2021. I'm Cole McNeely, filling in for Dan McAulb this week. Joining me, as he usually does, Dan, is D.C. Bureau Chief of the Center Square. Casey, how are you? Doing good, Cole. How are you? I'm doing very well. I'm happy to be here with you. There are a lot of stories this week, a lot of focus on the economy, particularly about inflation. We have some polls coming out that show that Americans are.

are concerned about the economy. Right. Yeah, I mean, rising costs are always a question around the holidays. People are out. They're shopping. They're buying their holiday ham, their Thanksgiving turkey, whatever it is. Of course, the Christmas shopping. So, you know, it's always an annual issue.

But this year has been unlike any in recent history. We've really seen prices this year rise at the fastest level in decades. And it's hurting Biden's poll numbers, just to back that up a little bit. but the consumer price index, which is a key marker of inflation that federal government keeps track of. The most recent data shows a 6.8% increase in consumer prices. And some people would say that's actually lower than what actual inflation is. But it's a good marker. It's a good signpost to point us in the right direction.

And that is, you know, the fastest growth in 39 years right there, that one. And then the producer price index came out and it showed nearly 10% price increases. And that is the fastest since, like on record for that growth, which is, it's only been tracked in 2010, but it's definitely the highest on record. And so, you know, these things are making everyday items more expensive for Americans. For example, you know, there's a report that came out this week that we covered at the cunnersquare.com. and the Wharton School of the University of Pennsylvania, which is one of the leading business schools in the country, they sat down and they said, okay, these prices are going up, but how much is it actually costing people? And they, you know, their analysis found that the average U.S. household spent about $3,500 more a year because of inflation. So it costs them $3,500 a year. That's nearly $300 a month, which for a lot of households, an extra $300 a month bill is no small thing at all. And so this is all kind of a swirl that is one of Biden's biggest problems with American voters right now. The sadder thing about that report is it found that the poorer family was, the harder hit they are.

So, you know, it may seem obvious, but it's worth pointing out the lower income households will have to spend about 7% more while, you know, higher income households will spend less, more like 6% or depending on how much they make. but a 7% increase in prices for a poor household over the course of one year. I mean, you can almost be certain that unless someone has a big job change or career change, getting a 7% increase and pay in one year, it's not happening. And even if you did do that, to get a big career change, a new job, excited about your big pay raise, guess what? It's all going to the rising costs. costs, you're not actually getting to enjoy that money. You're spending it at the grocery store

at the gas pump. And so, you know, I've alluded to this poll with Biden, but I'll just say, you know, it was an ABC Ipsis poll released this week, and it found that 57% of Americans surveyed disapprove of Biden's economic policies. You know, generic polls show that voters tend to trust Republicans more on the economy and Democrats more in COVID. Right now, those are two of the defining issues and, you know, Democrats get more trust on COVID. And I think that was a bigger issue in the last election. But if with these inflation numbers, it could really hurt the 2022 Democrats as the economy becomes a bigger issue and, you know, Biden's policies erode trust on the economy. But on inflation, specifically, the ABC EPSS poll found that 69% of those

survey disapprove of how the president is handling inflation, notably, seven, 71% of independence. So to have a key issue, it's rated as one of the top issues on Americans' minds. And to have 69% disapproval for Americans, it really does have a lot of Democrats worried, especially as they handed into 2022. Well, and it's interesting. You mentioned the split between Americans trusting Republicans worth the economy, Democrats, more with COVID.

Right now, the two are obviously so intertwined. I mean, I think that's going to be part of the interesting thing. we come into the midterms here. Obviously with the economy and COVID and all these things, companies less likely you take risk. I mean, it's just kind of creating a sense of stagnation overall. And you get concerned about that sort of thing. And to me, too, right?

So beyond, there's the obvious economic numbers you can point to and that sort of thing. But when you have a portion of your society that's already struggling economically, you throw in policies that are. right wrong or indifferent because of public health and everything has a cost and I'm not discounting that at all but you throw in policies that impact the economy as well you're going to create polarization you're going to create divide you're going to create a lot of unhappy people right and an illustrative example of that would be the lockdowns and so you you kind of reference them but the the lockdowns were a pretty aggressive approach to stop COVID

and they impacted people so different people so disproportionately, right? So if you're like a middle or upper class guy who sits on a laptop and works remotely, sure, lock things down. Like, okay, it doesn't bother me, you know what I mean? If you just produce podcasts for a living on your pajamas, you know what I mean? Hey, I'm wearing a colored shirt right now. Oh, you are. Yeah, me too.

I am too. You see, I mean, hey, the folks at home, they can't see me, but you can see me and I parted my hair for you and everything. I've got headphones on. I still look pretty good this morning, Casey. It's a Hawaiian shirt, folks, just so you know, but it is collared. It is collared. Correct.

No, Cole looks great. But I think the idea is that, you know, if you work remotely, you say, well, okay, log down, this might be hard, but we can get through it. But if you're in this poor bracket, you know, and you wait tables full time, plenty of people wait tables full time, you know, and people start talking about shutting down restaurants. It's a pretty big problem for you. You know, if you work in a retail or service industry, which, you know, many of those poor households rely on those jobs to have politicians casually talking about shutting down your livelihood is exactly what you said, Cole. It's a divide because

to one part of the country, shutting down restaurants means that their weekend will be marginally less fun. And to another part of the country, shutting down restaurants means I won't get a paycheck. And so what's entertainment for one class is livelihood for the other. Well, and part of the challenge, too, combine with any governmental policies that are put into place, there is a, I guess you'd call it a cultural concern about going out. And I think less people are probably going out than they were before COVID. It's, I mean, this is no surprise and should be no surprise. But a lot of purchasing power in general fall into older demographics that just tends to be the nature of the economy as you age, you tend to accumulate more purchasing power and the ability to go out and purchase.

If you're in that older demographic, you're obviously more susceptible to serious health issues. I mean, it's, and so you're less interested in going out and doing things and partaking in the economy on a daily basis that you may have before. You know, if you were an older person that maybe you went out to lunch every day before, that's how you got out of the house. maybe you're not doing that. And if that is culturally kind of what's happening, you know, there's the governmental side of it. But that's just on top of people's already health concerns about going out and getting back into society.

You're the journalist here. I can kind of, you know, I can go give my opinion a little bit more. You wore a collared shirt, so you kind of have permission to speak. Yeah, I'm a collared shirt guy. That's what I am. That's when I walk in. Have you kept up to date with the Urban Meyer nonsense that's going on when? Like, no, but I know that something is going on.

Yeah, so he got fired by the Jacksonville Jaguars. He's the head coach, but he kicked, he literally physically kicked his kicker. And he said he could do what he wants because he's the head ball coach. And, you know, I feel the same way. You know, I can do what I, I can say what I want. I'm wearing a collar shirt. Got it. Okay.

All right. So, well, as Americans are struggling to perhaps have the purchasing power and the ability to have flexibility in their finances, you know, it appears that the, the Congress overall, they're not having that same issue, Casey. Senate voted to raise the debt ceiling by $2.5 trillion. What's going on there? Yeah, while Americans are worried about the extra $300 a month, you're right. Congress doesn't really have those same concerns.

Actually, now, you know, Biden just signed the $2.5 trillion increase to the debt limit. Now, people get kind of confused the difference between funding the government and the debt limit. you know, there are two separate processes and two separate, the two separate functions. So funding the government, you know, Congress has to pass continuing resolutions. Well, they're supposed to pass a budget, but they haven't done that in a long time because things are so dysfunctional and divided. And they can't agree on a budget. And so they get down to the wire and they pass a continuing resolution, which just says,

hey, we're going to spend this much money and that's going to get us through March of next year or whatever it is, right? or we're going to spend this much money and it's going to get us through this many weeks or months. And by get us through, I mean, it's going to pay for the salaries of federal employees to keep the basic, you know, essential is open, to keep the IRS digging around in your affairs to keep the national parks doing their thing. That's what keeping the government open means. Now, the debt ceiling is different. you may not know this Cole. I don't know if you know this, but the U.S. is in debt.

We'll not take it off topic. No, let's get off topic. Yeah, well, okay. Well, you know, the debt ceiling, all that is fascinating stuff. Don't get me wrong. But what is interesting to me, and I'm actually genuinely interested to get your opinion as a journalist. The Facebook fact checkers, I forget if it was in a lawsuit or what it was, they, Facebook, meta, whatever, the company claimed that, the fact checkers weren't objective, that the fact checker, basically what the fact checkers were

saying were subjective opinions, which I thought was fascinating. Yeah. Well, didn't Facebook agree and say, you can't sue us for these because they're just opinions? Right. Yeah, they said you can't sue them because, I mean, I just thought that was a fascinating thing. And you would think that that fact checker role would operate more as a journalist than it would an op-ed columnist. I mean, I mean, it, no, it totally did.

They're just trying to change it now because they're in a law. suit. I think that they are probably, I mean, I don't know all the details of the case, but I think they, at least, you know, on the outside, wanted it to be seen as a, you know, of a true fact check. Really, this is like a great example of when some few vocal elements on the left kind of start bullying leaders in groups and just it's a, it's a, they're insatiable. Not to weigh too much on the merits of it, but there's, you know, vocal, political minorities are never satisfied. And so you have to be careful catering too much. You see corporations get caught into this. You see politicians get caught into it. Obviously, Facebook did. No matter how much you censor, no matter how much you do,

there's always going to be some random post that was never be enough. And so I think they're kind of learning that to the hard way. And now the other side, the riot is suing them over what they did. Well, and you know, it's interesting. So the idea of it, and we're getting off topic, but I think that's okay. The idea of the kind of objective fact checker, I don't inherently have an issue with that. I mean, it's no matter your political persuasion or anything, I think it's pretty fair to objectively say that Facebook and social media in general have a lot of disinformation, a lot.

Just falsehoods. I mean, I see stuff all the time. People who say like, oh, your aunt. shared something and, you know, some stupid graphic. And they're never well done. They're always like blurry. I don't understand why people think. It's like a screenshot of a screenshot of a screenshot of a screenshot.

Yeah. And it looks like it was on, you know, in like Microsoft 1995 or something. And so, you know, I don't have any issue honestly with the fact tracker thing. I just think it's more interesting from the, from Facebook's perspective where now they're like, you know, they're not willing to die on that hill. And I thought, you know,

Because I thought to a degree, it's like, you know, this is a good thing. You have to be careful who those arbitrators are. But, you know, it's not inherently a bad idea because it seems to be a rampant issue and that stuff spreads like wildfire. But it's the same point. If you're not willing to stand up and say, yeah, this person is the objective middleman. It's kind of, to me, it just makes the whole thing seem like a facade. So just interesting.

You know, I thought as a journalist, you know, Casey Harper, wrote with their DC Bureau chief of the Center Square. Yeah. You would think, again, that it would almost, if you were a journalist and you were reporting on something and somebody came after you're reporting. Oh, it's happened at the Center Square. We've been fact-checked. We've been wrongly fact-checked by social media on some of the articles.

And the thing is, though, you know, take the objective fact-checking thing away, right? Take that away. If somebody had an issue with an article you wrote, right, from the Center Square, because that's really what we're talking about. This is objective information that Facebook is putting out there. Supposed of it. If somebody had an issue with your content and you, as far as you know, you're trying to do your best to be objective and somebody, you know, the Center Square comes and Chris

Kruh, president of the Franklin News Foundation comes in. He says, oh, no, Casey's basically an op-ed writer. It's like, hmm, that just seems like it undermines the whole project. So anyway, sorry. We got off base there, but I was falling asleep listening to the debt. ceiling. You know, it seems like an issue for our grandchildren, Casey. You know, that that's the, that's the real witness. We'll just leave climate change, the debt ceiling, Russia, China is, you know, taking over pretty much the whole world through malicious investment. You know, it'll be fine.

Here's the thing. They'll have more information than we do. You know, they will. We have more, I mean, we're not there yet. We're not there to the point that we can handle this stuff. So let's just keep raising debt ceiling. I mean, Casey, actually, a genuine question on the debt ceiling. How often do we, how often does this happen, the debt ceiling race? I mean, I've heard this. I think everybody's heard about this being done.

But is this a pretty frequent thing that happens? Well, it's like becoming exponentially more frequent because the debt is growing exponentially. But, you know, 20 years ago, we had no debt. And now we have 30 trillion. You know, we had a balanced budget under Bill Clinton, and now we have $30 trillion in debt. So it's hard to answer that question exactly because it's not scheduled. They raise the debt ceiling as much as they want. And so they can raise the debt ceiling enough to last two weeks or two years if they want.

Briefly, hey, not to Facebook fact check you here, but we had debt. We had debt. We weren't just going into more debt under the balanced budget. So what you mean? Because, I mean, we did have standing debt at that time. Are you sure? Yeah. And I believe you.

If you Google it. I mean, I'll, hey, you go on your spiel. I'll, I'll Google this real quick and I'll make sure. And maybe I'm wrong. Yeah, maybe I'm wrong. The reason I say it is because I know the United States went to quite a bit of debt in the 1980s with Reagan administration. Sure. They're billed up in the military.

So I, I understand. I understand you're saying balance budget as in no deficit. Yes. Yeah, we're not agree. Not as in like Dave for MC style. we paid off all our debt. Yeah, I think I said the wrong thing. You're right.

Thank you. Thank you. Yeah, fact check. Hit me up Facebook. All right. Yeah. Go on. I interrupted you.

No, you're fine. So, yeah, the deficit's out of control. The debt is growing exponentially. And so they already raised the debt ceiling once this year because if they don't raise the debt, so that it's stilling needs to be raised because the U.S. has financial obligations. Like we have the equivalent of credit card bills come in every month. And we have to pay the minimum payment on those bills. But we have a lot of credit card bills.

We just have a ton of them. And we have interest payments. So if we don't raise the debt ceiling in time, we actually, it's like our credit score will take a hit in the same way if you don't pay your credit card bill, which will have really terrible economic consequences for the country, for the global economy, really. And so we raised it $2.5 trillion, which they say will get us through the midterms. And that's kind of the big political implication. The Democrats do not want to be taking another vote. in a few months to raise the debt ceiling even more. It's really, when you raise the debt ceiling, it gets used against you in campaign ads and

different things. It's not a good political vote. It's kind of a necessity. That's why Republicans made the Democrats do it without any Republican votes, even though the Republicans are complicit in this whole debt ceiling idea, but they made the Democrats do it. But now I won't be an issue until after the midterms and in true political fashion nowadays, we'll let the next guys, the next Congress or the next guys worry about it.

I'm telling you our grandchildren's got this. Yeah, what's interesting too, right? So a lot of the times when we talk about the debt, it's kind of hard to conceptualize. The debt to GDP ratio, I know this is something I've seen pop up. 2021, 125%. So, I mean, that's incredible to think about that the debt is larger than the economy, basically. It's wild to think about. So, yeah, and to reference your numbers, I mean, this, this, this.

speaks to the rapid rise that we've seen in the last 20 years or so. 2000, there was about $5 billion of debt, and now we're sitting at $30 billion in debt. Trillion. I'm sorry. Yes. The, yes. 5 trillion. And, you know, Casey, we just fact check.

You know. If you, there really is a source online. If people want to go look on the balance. not to go to the center square but you know also if you want to see these numbers um they have a really neat chart here it talks with the fiscal year the debt and billions rounded that's why i said billions but obviously yes we are in the trillions at this point and then the debt to GDP ratio um fascinating to look at you can see the percentages percentages haven't been this high the debt to GDP ratio only other time it's done that was following world war two so this is this is certainly times that we have not

seen that's been hovering between, you know, 30 to 60 percent, you know, until about 2008. And since then it's been over 80 percent. So, I mean, this is, this is a rising concern. And to see it for this many years in a row, I think it's going to be interesting. Now, I would guess that the United States as a whole, meaningful policymaker standpoint, they're just betting on the U.S. dollar. That's probably about it. Yeah, they're bet on the U.S.

dollar, they're just, they're building in, you know, significant economic growth every year. So they kind of assume GDP growth. They assume that the economy is going to continue to be the strongest and continue to grow the fastest. And, you know, in a way, as long as we are the fastest growing economy, you know, not fastest growing, but as long as we're quickly growing, we're the largest, we maintain our kind of military supremacy, then this kind of house of card stays. together because no one can really challenge us on it. We're growing. We're good for it. But when 125 becomes 150, you know, 150% becomes 200, historically it's not, there's like not a lot of precedent for this. It's pretty, it's pretty, it is scary to me. And the scariest thing is

you reference it, but we're not, it's not like we're in wartime. It's not like we're an emergency situation where it's like, oh, we have to raise the debt because we're in a war. Like this is our our normal practice is aggressive, taking on aggressive debt. So what happens when we do get an emergency where we're in some kind of, you know, conflict or we're sending trillions of dollars to fight, you know, God forbid, Russia and Ukraine or something? Then, you know, it's like when you live paycheck to paycheck, you can make it until you have an emergency room visit. And then you're done. You know, you're in debt.

You're done. So that's kind of the state of things right now. Well, on top of that, too, I mean, not to get to, I don't want it to sound too doom and gloomy because I think you have to think, too, about this, the stakeholders here. European powers are significantly more likely to essentially partner with the U.S. on things and they will be China or Russia. I mean, in terms of the most powerful nations in the world, even if, say, China's economy does end up growing faster, larger, you were saying that, you know, that could kind of fend off those concerns. There is a certain amount of, and I think it's fair to say, objective decency that the United States may have over some other larger world powers such as Russia or China, which may lead to the United States being propped up enough even if the economy does slow down. So listen, non-economist, I'm just purely speculating here. That's what I do.

That's why I'm in podcasting. Casey, we'll do, we're running up close on time here. but I want to just touch on one other story. In terms of spending all this, Congress passed $770 billion defense bill, interesting part of that bill allows discharge over vaccine refusal. What's going on there? Just try to give me the 60-second version there because we are close. We both know I'm incapable of that.

But the bill is the National Defense Authorization Act. It is really an annual bill that funds the military. It pays for everything the military. to do from tanks to salaries to research to everything in between. It's a big project. Obviously, it's very expensive, $770 billion. It almost always increases every year. And a few things that were really controversial, I'll point out too, there was a push by Democrats to allow or to require women to be included in the draft and selective service. That was ultimately shot down. I think there wasn't the political will for it and a lot of people didn't want to just add another

lay of controversy to an already hectic Congress. And the other thing is there has been this vaccine refusal, which you pointed out, the Department of Defense policy basically allows that if you refuse to get the COVID vaccine, you can be discharged. And there was talk but that it would be a other than honorable discharge, maybe even dishonorable discharge, which is really serious. this bill prohibits the military from doing a dishonorable discharge or for those who refuse the vaccine, but they can still be discharged. So they've already been, you know, cases out of the Navy just said that they're going to start doing it. The Air Force, I believe, discharged 27 people for refusing to get the vaccine. So this is really happening.

This isn't just, you know, political posturing. The discharges are underway in the armed service. interesting stuff Casey Harper thank you for all these interesting stories you can go check out all these stories on thecentersquare.com that's the center square.com Casey Harper DC Bureau Chief of the cinder squares thanks for joining me today on America in Focus