Experts examined the Federal Reserve’s interest rates and consumer price data at the conservative think tank, who concluded in a paper released on Friday that since January 20, 2021, Americans had lost the equivalent of $4,200 in income per person.
Since January 2021, consumer prices have increased by 12.7%, significantly faster than wages, costing the average American employee $3,000 in annual purchasing power, according to Heritage analysts.
According to the Heritage Foundation, the tightening monetary policy of the Federal Reserve and rising borrowing charges on credit cards, mortgages, and auto loans have decreased the average American’s spending power by an additional $1,200 annually.
In a news release, EJ Antoni, research fellow in regional economics at The Heritage Foundation’s Center for Data Analysis, stated that working Americans are $4,200 poorer overall today than when Biden took office. The President and Congress are addicted to spending money. The Federal Reserve is complacently enabling this addiction by printing more money, which is the direct cause of the financial calamity facing American households. The average household has lost about $7,200, which was determined by multiplying the $3,000 inflation figure by two and then adding $1,200 in interest rate losses.
According to Heritage, the $4,200 loss figure cancels out the real annual earnings boost of $4,000 that transpired during the Trump administration for the average American worker.
To meet their living expenses, many Americans, according to Antoni, have taken on greater debt, even while interest rates on all types of consumer debt are rising.
In addition, since Biden took office, interest rates and mortgage rates have both risen, significantly raising Americans’ monthly expenses.
- How poorer is an average working American currently?
Working Americans are $4,200 poorer overall today than when President Joe Biden started office.
- What are Americans doing to meet their living expenses?
To meet their living expenses, many Americans have taken on greater debt, even while interest rates on all types of consumer debt are rising.
Disclaimer Statement: This content is authored by an external agency. The views expressed here are those of the respective authors/entities and do not represent the views of Economic Times (ET). ET does not guarantee, vouch for or endorse any of its contents nor is responsible for them in any manner whatsoever. Please take all steps necessary to ascertain that any information and content provided is correct, updated, and verified. ET hereby disclaims any and all warranties, express or implied, relating to the report and any content therein.