Treasury Secretary Janet Yellen appeared to be truth-challenged when questioned about inflation and the rising federal deficit under President Joe Biden.
Yahoo Finance’s Jennifer Schonberger asked Yellen during a Monday interview, “Have you been to the grocery store lately?”
“I sure have — I go every week,” the treasury secretary replied.
“It’s sticker shock, isn’t it?” Schonberger questioned.
“No,” Yellen flatly stated.
HOST: “Have you been to the grocery store lately?”
YELLEN: “I sure have — I go every week.”
HOST: “It’s sticker shock, isn’t it?”
YELLEN: “No.”
(Grocery prices are up 20%+ since Biden took office) pic.twitter.com/rmrzUfaGgh
— RNC Research (@RNCResearch) June 25, 2024
Schonberger followed up regarding grocery prices, “I know they’re not rising at the rate they were last year, but they’re still up 20 percent from pre-COVID.”
“Well, I think largely it reflects cost increases, including labor cost increases that grocery firms have experienced, although there may be some increases in margins,” Yellen replied, without a hint of irony.
Have you noticed an uptick in your monthly grocery bill?
Yes, that’s how inflation works, Secretary Yellen. Costs go up to sellers of goods, like grocery store owners, and they pass those costs on to consumers, because otherwise owners can’t continue buying from their suppliers or paying their employees.
Oh, and wage increases are not keeping up with inflation.
Heritage Foundation economist E.J. Antoni calculated the nearly 20 percent increase in cost of goods means Americans’ inflation-adjust paycheck has dropped about $50 per week, $200 per month, or $2,400 per year.
One strong driver of inflation is the increased cost of energy under the Biden administration, which is directly attributable to the president’s policies.
He shut down the Keystone Pipeline and greatly restricted oil and gas exploration on federal lands and robbed the Strategic Petroleum Reserve to try to offset the lost production and keep costs down.
The average price for a gallon of gasoline in Jan. 2021 when Biden took office was $2.42. It’s currently $3.58. Food needs to be farmed using gasoline then transported to market using fuel and that increased cost all gets passed on to the consumer.
Additionally, there has been the massive increase in federal deficit spending during the Biden administration, which is inflationary.
Schonberger asked Yellen about the Congressional Budget Office’s newly projected nearly-$2 trillion deficit for 2024, up $400 billion from the CBO’s February estimate.
Yellen conceded that spending needed to be brought down or the country would face a debt crisis, but then sought to shift the blame to the Tax Cuts and Jobs Act signed into law by then-President Donald Trump in 2017.
She noted that many of the tax cuts are due to expire next year.
Yellen argued that Trump’s tax cuts “resulted in an enormous increase in the deficit and lowered tax revenues below historic norms. I think it’s responsible for many of the problems that we face now with our fiscal trajectory, so that would concern me to leave all of that in place.”
That simply is not true and Biden conceded as much during remarks he made in March 2022, saying the country was experiencing “the best economic growth we’ve seen in this country in over 40 years. This has led to a substantial increase in government revenues and dramatically improved our fiscal situation.”
That’s exactly what Trump and Republicans said would happen.
The numbers speak for themselves. The federal government took in a record $4.9 trillion in fiscal year 2022, which represented over a 20-year high as a percentage of the Gross Domestic Product of 19.02 percent.
Revenue fell back to $4.44 trillion in fiscal year 2023 as the economy slowed due to the massive inflationary deficit spending spree the Democrats took the nation on. That amount still represented 16.23 percent percent of GDP, which is around historic norms.
By way of comparison, the federal government took in $3.3 trillion in revenues in 2017, prior to the Tax Cuts and Jobs Act being implemented.
Last week, The Wall Street Journal’s editorial board, in an piece titled “Soaring U.S. Debt Is a Spending Problem,” pointed out that federal revenue as a percentage of GDP is on solid ground.
“Revenue is expected to total 17.2% of GDP this year—roughly the 50-year average before the pandemic,” but, they added that spending is expected to hit 24.2 percent of GDP this year.
Total federal expenditures in FY 2023 were $6.1 trillion, not far behind the $6.6 trillion spent in 2020 during the height of the pandemic.
This compares compares a pre-pandemic $4.4 trillion with a $984 billion deficit in fiscal 2019 under Trump.
“If spending as a share of GDP remained at the pre-pandemic average, the deficit would be roughly $890 billion this year,” the editorial board noted.
Yellen can try to spin it any way she wants, but Americans are facing the impact of the Biden economy every day at the grocery store. The facts and numbers back it up, but so too does a simple trip to grab groceries.
Further, the deficit problem is not that people are getting taxed too little, it’s that the federal government is spending too much.
