Economic indicators released Wednesday show that U.S. annual inflation hit a more than three-decade high in October. The economy continues to suffer from the Biden administration’s reckless spending and federal regulations that stifle any opportunity for growth.
Joel Griffith, research fellow in Heritage’s Roe Institute for Economic Policy Studies, made the following statement in response to the dismal economic indicators:
“The cost of living increased at the steepest rate in more than three decades this past year. Consumer prices jumped another 0.9%in October—an astounding 11.3%rate compounded annually. That’s a 6.2%increase compared to last October.
“The causes are rooted in supply chain bottlenecks caused by continued COVID vaccine mandates, union resistance to expediting port operations, and tightening environmental regulations on the trucking industry. Labor market problems—driven largely by government policies such as generous COVID relief benefits, sporadic school closures, and now vaccine mandates—also contribute to rising costs. Adding to the pressure, the gusher of federal spending is spurring demand while other government policies continue to suppress supply—including the supply of affordable energy.
“Given the prolific government spending underway and the trillions of additional spending proposed, Americans have good reason to worry about inflation from ‘too many dollars chasing too few goods.’
“Inflation is a hidden tax that robs Americans of productivity gains, makes real wages lower than they otherwise would have been, and distorts price signals vital to ensuring workers, investments, technology, and natural resources are used in a manner most responsive to the real needs of the market.
“America’s central bank contributes to the steep rise in prices by using trillions of dollars of newly created fiat currency to finance federal spending by purchasing government bonds in addition to injecting enormous sums into the financial markets by purchasing other assets.
“The enormous expansions of government spending proposed by the left will come at a cost. Americans will pay either through direct taxation, higher borrowing costs (as the government competes with businesses for available capital), or the hidden tax of inflation as the central bank purchases government debt. This inflation tax can be the most destructive and painful of all.”