We’re paying more for food because Congress refuses to control spending. This is the testimony I gave recently before a Senate committee, and the committee chair, Senator Elizabeth Warren, refused to believe the evidence presented. Her plan is not to cut government spending, but to make food prices even higher.
The Massachusetts Democrat Warren and many other politicians are to blame for the inflation that has plagued the American people over the past three years. Our Congressional representatives, along with President Biden in the White House, have spent trillions of dollars that we don’t have, and that money had to come from somewhere.
It’s coming out of your wallet right now through the hidden tax of inflation.
To finance the astronomical federal deficits of the past few years, the Federal Reserve has essentially created money for the Treasury to spend. On the surface, this seems like a win-win scenario: politicians can spend trillions of dollars and people don’t have to pay a corresponding tax.
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But that’s an illusion. The Fed devalued the dollar by creating a lot of money. By giving these newly created dollars to the Treasury, the Fed transferred wealth from the people to the government. There’s no better definition of a tax.
This transfer of wealth isn’t all at once, and it’s secret because it doesn’t show up on tax returns or receipts. But every time you get a shocking price at the grocery store and pay an ever-increasing food bill, you’re paying a hidden tax called inflation.
Politicians like Warren and Biden are not only unwilling to accept responsibility for causing inflation, but are busy scapegoating others, with corporations being the favorite devil in their political demonology.
Warren boasted on stage at her Senate hearing that food prices are soaring because of corporate greed and so-called price gouging, casually casting about serious allegations of collusion and price fixing without providing any evidence of such illegal activity in the food industry.
Instead, the evidence tells the exact opposite: Companies are simply passing on their increased costs to consumers, and the Biden Administration’s own data proves it.
Cumulative inflation, as measured by the Consumer Price Index, has risen by about 19% since Biden took office. Similarly, prices paid by businesses, as measured by the Producer Price Index, have risen by about 19%.
Grocery stores pay more for the food on their shelves, and so do we, and that’s the simple truth. If these stores don’t pass on the increased costs, they’ll go out of business.
In fact, price increases paid by consumers are only just catching up with price increases paid by businesses over the past few months: For almost the entire period since January 2021, cumulative PPI increases have outpaced CPI increases.
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In other words, companies have spent much of the past three years trying to protect consumers from rising food prices, which is why food industry profits are lower in 2021 and 2022 than they were at the end of 2020.
Corporate profits are up today, but not when adjusted for inflation: they’re down 4.2%, roughly the same as the inflation-adjusted loss of 4.4% in the average American’s weekly wage.
Just as your pay has increased, but it can buy less. Similarly, corporations have made more profits, but they can buy less. Consumers and corporations are at a disadvantage in every sense because Congress and the White House have confiscated trillions of dollars in value through the hidden tax of inflation.
Contrary to what Warren and other politicians claim, corporations weren’t suddenly greedier in January 2021 than they had been at any time in the past 40 years. What actually happened then was that big spenders gained power, leading to the highest inflation in 40 years.
The only way to stop inflation, including food prices, is to cut wasteful government spending, but if Warren and Biden have their way, the federal budget will be even higher next year, which will mean higher grocery bills.
