Casey Harper (The Center Square).
This week saw a new high in gas prices and inflation, leading to more concern about how this will affect regular Americans as well as the future prospects for the U.S. economic system.
Thursday was reported by the Bureau of Labor Statistics that the Consumer Price Index (a key indicator of inflation) rose 7.9% during the 12 previous months.
“The 12-month increase has been steadily rising and is now the largest since the period ending January 1982,” BLS said. “The all items less food and energy index rose 6.4 percent, the largest 12-month change since the period ending August 1982. The energy index rose 25.6 percent over the last year, and the food index increased 7.9 percent, the largest 12-month increase since the period ending July 1981.”
Rising food prices are a key reason for the general increase in American living standards and have been a severe pain point for Americans.
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“The food at home index rose 8.6 percent over the last 12 months, the largest 12-month increase since the period ending April 1981,” BLS said. “The index for meats, poultry, fish, and eggs increased 13.0 percent over the last year as the index for beef rose 16.2 percent.”
AAA says gas prices rose to an all-time high, with the average national price of $4.32 per gallon compared to $2.82 last year.
Experts agree that the rise in gas prices has made all products more costly.
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“Thanks to the Biden administration’s policies, inflation is a growing tax hurting all Americans,” said Joel Griffith, an economic expert at the Heritage Foundation. “A married couple with $6,000 of monthly expenses – such as groceries, gas, housing, clothing, and other household needs – is now overwhelmed, with $480 in increased monthly costs dwarfing average wage gains. For a typical family, the inflation tax means a loss in real income of more than $1,900 per year.”
Griffith claims that this problem will get worse if the Biden administration raises spending and slows down domestic energy production.
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“Now is the time for the Federal Reserve to stop its rampant printing of money and for the federal government to halt reckless spending. Both exacerbate inflation,” he said. “Unfortunately, lawmakers are trying to push through a 2,741-page omnibus bill that spends $1.5 trillion and includes 367 pages of special-interest earmarks. This administration is continuing to suppress productivity and economic output with delusional policies such as preventing access to ample energy resources. These actions will certainly benefit the politically connected and elite special interests but will make economic struggles worse for working Americans.”
Biden specifically cited the Russian invasion in Ukraine as the main reason why gas prices have risen. He banned the importation of Russian oil earlier this week as a measure to help “defund” the war against Ukraine.
“The decision today is not without cost here at home. Putin’s war is already hurting Americans at the gas pump,” Biden said in his announcement of the ban. “And with this action it’s going to go up further. I’m going to do everything I can to minimize Putin’s price hike here at home.”
Critics point out, however, that gas prices are on the rise in recent years.
“For months before the Russian invasion of Ukraine the Biden Administration watched as their polices punished our domestic energy production drastically raising prices across the board,” said Daniel Turner, head of Power the Future, an energy workers advocacy group. “Today they are trying to pin all the blame on Putin, but the American people are not falling for it. Biden has made overtures to Iran, Venezuela, and Saudi Arabia to increase production.”
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Critics are calling for an increase in domestic energy production, which was hindered by Biden’s early decisions on pipelines and drilling permits.
“The only one [Biden] hasn’t reached out to is the American energy industry,” Turner said. “If he would only take away the burdens he has placed on us we could see a huge reduction in costs and inflation as we ramp up production. Biden prefers to appease radical green movements than acknowledge the failings of his policies.
We need a president who doesn’t see American industry as the enemy,” he added.
Others added that stagflation, which occurs when inflation increases amid stagnant economic growth, could be “just around the corner.”
“The United States is now in a precarious position where our rampant inflation rate is going to begin to infringe on the economic recovery,” said Erik Randolph, director of research for the Georgia Center of Opportunity. “Stagflation could very well be just around the corner. Americans may have to cut back on gas as prices rise and other categories continue their upward spiral. The impact on the economy will be significant.”
The Center Square permission granted this syndicated version.