(The Economic Collapse Blog)—Do you believe the politicians in Washington or do you believe your own eyes? The politicians keep telling us that “inflation is low”, but everyone can see that everything sure does cost a lot more than it once did. Our standard of living just keeps going down, and even JPMorgan Chase CEO Jamie Dimon is admitting that “inflation is hurting people”. But how can inflation be “hurting people” if it is under control? Of course the truth is that it isn’t under control. If the official rate of inflation was still measured using the formula that was in place in 1980, it would be well into double digit territory right now. Prices have been rising much faster than paychecks have, and that is putting an extraordinary amount of financial stress on the more than 60 percent of U.S. adults that currently live paycheck to paycheck.
Vox is a website that leans very far to the left, and even they are complaining about inflation.
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In fact, a recent article posted on Vox boldly declared that life in 2023 “means being in a constant state of sticker shock”…
Life in 2023 means being in a constant state of sticker shock.
You walk out of the grocery store feeling like you’re not really sure what happened, but somehow, your normal fare ran you $50 more than you swear it should have. Did Diet Coke always cost that much? Or eggs? Maybe you’ve been putting off buying that new car in the hope prices go back to where they were pre-pandemic, but you’re starting to feel like the wait is awfully long. Or, the morning after a post-work happy hour, you’re left scratching your head. You swear you had two glasses of wine, but the size of your credit card receipt makes you wonder if it wasn’t four. “How expensive everything is today” is a top theme of conversation. The whole situation can be infuriating.
I don’t care for Vox much, but those two paragraphs are quite accurate.
Prices have reached absurd heights, and most of us really are “in a constant state of sticker shock” these days.
And the cold, hard numbers back this up.
According to a report from Republican members of the U.S. Senate Joint Economic Committee, the typical household in this country “must spend an additional $11,434 annually” in order to have the same standard of living that it did when Joe Biden entered the White House…
The typical American household must spend an additional $11,434 annually just to maintain the same standard of living they enjoyed in January of 2021, right before inflation soared to 40-year highs, according to a recent analysis of government data.
So let me ask you a question.
Has your household income gone up by $11,434 a year since January 2021?
If you are like most Americans, your income has barely moved.
As I discussed last week, half of all American workers made less than $40,847.18 last year.
If you are one of those workers, life is not easy in 2023.
Even really basic things just cost so much at this point. For example, a Big Mac value meal will now set you back 18 dollars in some parts of the country…
A Big Mac burger, a medium beverage, and a medium fry meal now costs 18 dollars in some locations, up $10 from 2018 when former President Donald Trump was president.
Visiting McDonald’s has become something that only wealthy people can afford to do on a regular basis.
Of course it isn’t just fast food that has become painfully expensive…
- A pound of ground beef now costs $5.23 on average, up from $3.89 in January 2020.
- Coffee is up some $2 a pound. Prices for fresh fruits and vegetables are nearly 14% higher.
- At one point, the price of a carton of eggs was triple its pre-pandemic price.
When I was growing up, my mother would feed us ground beef all the time.
Now it is considered to be a luxury item.
Let me give you another example of how inflation is killing us financially.
The cost of auto insurance and the cost of home insurance are both going through the roof…
The skyrocketing cost of auto and home insurance is increasingly weighing on cash-strapped Americans.
In 2022, the average price of both types of insurance saw its biggest spike in more than five years.
And this year rates are projected to grow by an even greater amount, according to analysis from S&P Global Market Intelligence. Within the first seven months, both had already jumped by double-digit amounts.
When you combine both expenses, the average American household is now spending over $3,700 a year…
According to the latest analysis from Forbes Advisor, the average cost of home insurance is $1,582 a year for a policy with $350,000 coverage. And typical motorist pays $2,150 a year for full coverage car insurance.
That means on car and home insurance alone a household can expect to spend more than $3,700 a year.
How can anyone afford that?
And don’t get me started on health insurance.
Our system is so broken that only those with lots of money can afford a decent health insurance policy that actually has adequate coverage.
Needless to say, Joe Biden doesn’t want to take the blame for any of this. Last week, he was accusing large corporations of “price gouging”…
President Joe Biden delivered remarks from the White House on Monday to announce the new council’s creation. He touted the lower inflation rate and falling grocery prices but admonished American companies for, in his view, not going far enough.
“Let me be clear: To any corporation that has not brought their prices back down—even as inflation has come down, even as supply chains have been rebuilt—it’s time to stop the price gouging,” Biden warned, imploring them to “giv[e] the American consumer a break.”
Seriously? Other liberals are actually blaming you for inflation…
People hate inflation, just not enough to spend less: This is one of the central tensions of today’s economy, in which things are going great yet everyone is miserable. And in some ways, Americans have nobody to blame but themselves.
No matter how high prices go, most of us still have to pay the bills and put food on the table.
So there is only so much that we can “cut back” on our spending.
However, one recent survey did find that approximately a quarter of the U.S. population has been engaged in “doom spending”…
Nearly all Americans, 96%, are concerned about the current state of the economy, according to a recent report by Intuit Credit Karma.
Still, more than a quarter are “doom spending,” or spending money despite economic and geopolitical concerns, the report found.
A lot of people figure that if everything is about to fall apart they may as well enjoy things while they still can.
But I think that a much wiser approach would be to use the resources that you have to get prepared for the tremendous chaos that is ahead of us.
Economic conditions are going to get a whole lot rougher from here.
So enjoy these relatively stable times while you still can, because they will not last indefinitely…
Michael’s new book entitled “Chaos” is now available in paperback and for the Kindle on Amazon.com, and you can check out his new Substack newsletter right here.
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