Biden Convinced Himself Americans Have Cash To Spare

Written By BlabberBuzz | Wednesday, 24 November 2021 10:50 AM
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Biden Convinced Himself Americans Have Cash To Spare

On Monday, President Biden attempted to cover the increasing inflation with a positive remark, saying that "disposable income" has grown due to government aid — but not referring to the fact that wages are losing buying power due to increasing prices.

Biden gave the optimistic comment while announcing his decision to nominate Jerome Powell for a second four-year term as Federal Reserve chairman.

"After years of wages being flat or falling behind, we're also seeing something else. Things are getting better for American workers: higher wages, better benefits with flexible schedules," the president said.

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"Balance sheets for American families are better as well: savings are up, home equity is up, credit card balances are down," Biden added. "And if you continue and combine the wage increases we've seen with the direct relief my administration's provided to middle class families, the typical middle class family's disposable income has actually gone up 2 percent this year, even after accounting for higher prices."

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The President added: "America is the only major economy, the only one in the world, where the economy is bigger today and families have more money in the bank today than before the pandemic hit. That's even after accounting for inflation."

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However, the value of money earned by employees— not including government subsidies — is down this year due to the highest inflation in 31 years, according to official data.

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The Bureau of Labor Statistics said earlier this month that although wages are increasing, they aren't rising fast enough.

"Real average hourly earnings for all employees decreased 0.5 percent from September to October, seasonally adjusted … This result stems from an increase of 0.4 percent in average hourly earnings combined with an increase of 0.9 percent in the Consumer Price Index for All Urban Consumers," the BLS said.

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Inflation took an even larger portion out of wages when estimated over 12 months. The Labor Department's Consumer Price Index surged 6.2 percent in October from a year earlier, canceling wage gains and showing the highest impact since 1990 in the cost of goods and services.

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"Real average hourly earnings decreased 1.2 percent, seasonally adjusted, from October 2020 to October 2021," according to the BLS report.

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"The change in real average hourly earnings combined with a decrease of 0.3 percent in the average workweek resulted in a 1.6-percent decrease in real average weekly earnings over this period," according to the report.

Biden last week signed a $1.2 trillion bipartisan infrastructure bill that the Congressional Budget Office said included $256 billion in unfunded spending, possibly increasing inflation even more.

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