This Fourth of July felt particularly ironic. We celebrated the anniversary of America’s Founding Fathers declaring independence from a monarchical ruler, yet we find ourselves in a similar situation today.
While the Founders risked everything to free the country from tyranny and succeeded in doing so, President Joe Biden has reversed their advances in liberty. His stifling regulations , disregard for constitutional order , and massive subsidization of the activist Left mean that people remain burdened by the whims of the chief executive.
In 2021, Biden inherited an economy that had largely recovered from the COVID-19 pandemic, with annual inflation at a mere 1.4%. He and his allies in Congress proceeded to launch a campaign of reckless “ stimulus ” spending and economic micromanagement on a scale that King George III could have never imagined.
The Biden administration’s executive actions and administrative choices have cost more than $700 billion . In just 3 1/2 years, the gross national debt has increased by more than $7 trillion, or roughly $53,000 per household. The annual interest payments alone on that debt are now more than $1 trillion.
Hardworking people are paying a heavy price for the Bidenomics agenda, which unleashed the highest inflation in 40 years and forced up interest rates.
Prices have risen so fast under Biden that despite the average worker’s weekly pay increasing more than $150, that larger paycheck buys about $40 less. For the typical family with two parents working, this lost purchasing power is the equivalent of losing almost $4,300 in annual income.
Adding insult to injury, higher interest rates have increased borrowing costs on everything from mortgages to credit cards, and from student loans to auto loans. The deadly combination of high prices and higher interest rates has caused the total cost of purchases to explode.
For example, the monthly mortgage payment on a median-price home today has increased 120% since January 2021.
The typical family’s lost purchasing power from inflation and higher borrowing costs have together cost them the equivalent of almost $8,000 in annual income. Bidenomics has dug quite a deep hole for the average person’s finances.
If this sounds bleak, remember that there were many dark moments for the fledgling United States during the Revolutionary War, but the American spirit held firm for years despite those difficulties and persevered to victory.
Similarly, it will likely take years to undo the damage caused by Bidenomics and remove Washington from the center of economic life.
Congress is primarily responsible for setting federal policy and deserves much of the blame for what has occurred over the last three years. The Biden administration, for example, could not have implemented most of its radical agenda without having access to hundreds of federal agencies, thousands of programs, and trillions of dollars in spending authority.
A serious examination of federal activity reveals many opportunities for streamlining.
The more than $1 trillion per year in transfers to state and local governments, for instance, not only leads to mountains of waste but also centralizes power in Washington in ways that go against the nation’s founding principles — and often the 10th Amendment.
Congress should also rein in spending on special interest handouts, pork projects , and agencies that promote the agenda of the activist Left . Removing wasteful and unnecessary spending would be a necessary first step toward a responsible federal budget.
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In turn, significantly lowering federal deficits would reduce inflationary pressures in the economy and make it easier for interest rates to come down to earth. That would allow families to finally catch up with the higher cost of living that is the main hallmark of Bidenomics.
In 1776, the cause of freedom in the New World meant winning independence from Great Britain. For America’s semiquincentennial in 2026, it will mean winning independence from Washington’s failed economic agenda.
David Ditch is a senior policy analyst, and E.J. Antoni is the Richard F. Aster fellow, at the Heritage Foundation’s Grover M. Hermann Center for the Federal Budget.
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