To the Editor:

Economists and the government use the Consumer Price Index (CPI) to see the status of the overall economy of the US. The CPI tracks the cost for food, housing, clothing, healthcare and various other items. What it doesn’t follow is when you have to buy less expensive items because of the higher cost of goods. So in the past you may have purchased name brand bread and now, since it’s too expensive, you’ve downgraded to the store brand. Yet the CPI assumes you’re still buying the same amount of the expensive bread.

The problem was inflation came into our every day lives in 2021. Treasury Secretary Yellen and Biden said inflation was “transitory”. Recognizing that was an illusion, in March 2022 the Federal Reserve was required to raise interest rates to stave off a recession. They’ve done so 11 times.

There are many reasons inflation is gripping us. The supply chain problems as a result of the pandemic caused a shift in demand for various items. Then the lockdowns in China who satisfies our demands for those items. Of course the pandemic relief funds doled out by both Trump ($2 trillion) and Biden ($3 trillion) play a part.

In 2022 Congress signed Biden’s Inflation Reduction Act (IRA). It was touted to have a huge impact on the economy. Actually the spending and tax changes it covers have not been a significant factor in reducing inflation. As Biden even admitted the bill didn’t have anything to do with reducing inflation, it was “... the single-largest investment in climate change ...”. In fact, the IRA is filled with tax incentives paid out to corporations, ignoring market-based capitalism.

Federal debt is subtracting spending from revenue (tax collections). If the revenue exceeds spending you have a surplus. If spending exceeds revenue you get a deficit. Just because there’s a smaller deficit doesn’t mean the debt shrunk, it only means the debt grows slower than it did before. With a federal revenue of $4.7 trillion, and the interest rate of 6.41% we’ve got a long way to go to balance the federal budget.

In his State of the Union address in March Biden said, “We’ve already cut the federal deficit by over $1 trillion." But the debt continues to rise under Biden. In 2021 the debt stood below $27.8 trillion, now it’s $34.4 trillion.

Next week let’s discuss the threat to democracy.

Patti Walker
Fillmore, Ca.