Your Parents Just Paid For Those COVID Stimulus Checks

We were pretty free with our government cash in the last couple of years, direct checks, business loans forgiven, extra weeks on unemployment, so much more.

We watered down the dollar and inflation is upon us. We can’t stop it. You should be mad as hell.

Now we are paying for it. In fact, the people paying for it the most are the people least likely to be able to recover from it.

Retired folks, people with savings accounts.

There are 55 million people 65 and older. Just a rough estimate (I’m not the CBO, after all), if they each have about $200,000 in savings and they suffered (Bloomberg reported) 7% inflation in 2021 , then that is $770 billion in lost spending power.

If this continues for the next three years, 7% compounded comes to about a 25% loss of buying power total. That means about $2.7 trillion lost to seniors on fixed income.

It also means that if you are an average hourly wage earner at $16.36, in 2024 you will lose about $8500 in spending power. Can your cousin who works at Walmart afford that? Or your niece at UPS? That is likely more than their monthly rent if they are on their own. Certainly more than their car payment.

If you are reasonably successful and make $80,000 per year, and have your house with the two car garage, guess what? Your new salary is $20,000 short, it is like you are paying a new mortgage on someone else’s house.

We see it all around us now, it comes in spurts. Gas is up to about $3.50 per gallon. My favorite spicy chicken wings, 20 each, up from $9.99 to $16.99. Higher rent, higher electricity, higher phone bill. The TV you wanted is $1200 instead of $799 on sale. Can’t eat out so much at restaurants, the prices are higher.

Bottom line, government mismanagement of our federal budget (on both sides of the political fence) has screwed us, and there is no end in site. The Fed is about to raise interest rates, which is the normal way to deal with inflation, slow down the economy to let production catch up.

Unfortunately our national debt is now so massive that when interest rates are raised, our debt will get bigger, triggering a new round of inflation. This won’t work now. We have never been in this position before.

What now?

Original Article: https://punchingbagpost.com/inflation-your-parents-just-paid-for-those-covid-checks/

UncategorizedWorld & U.S. News