Even as Americans grow increasingly pessimistic and agitated about their personal finances, Congress is about to ask struggling families to cover the cost of more funding for Ukraine.
The $95 billion foreign aid package adopted Saturday by the House and facing near-certain passage in the Senate includes an additional $61 billion for Ukraine. Once added to the money already appropriated for Ukraine since 2022, the United States will have spent approximately $173 billion.
That translates to more than $1,300 per American household, according to Heritage Foundation economist Richard Stern, director of the Grover M. Hermann Center for the Federal Budget.
Well over $1,300 in new inflation taxes per American household! https://t.co/YNKpu8OA58
— Richard A. Stern (@RichAStern) April 21, 2024
“This will continue to drive higher inflation and interest rates and increase the cost of living for Americans,” Stern told The Daily Signal. “No matter where you live, every American family will pay the price.”
Stern explained that the funding isn’t offset with spending cuts and will instead be added to “the national credit card and by printing cash out of thin air at the Fed.” He warned that it will devalue the U.S. dollar as well as the paychecks and life savings of all Americans.
After three years of Bidenomics, Americans are feeling exasperated about the economy, pollster Scott Rasmussen discovered in an RMG Research survey conducted earlier this month.
- Only 19% of Americans surveyed say their personal finances are improving. That number has dropped five percentage points since January and is at its lowest point in 18 months.
- Nearly half, 44%, say their personal finances are getting worse.
Inflation, caused by excessive government spending, is a significant factor in Americans’ economic outlook, according to Rasmussen’s survey.
- More than three-quarters of Americans, 76%, say their wages aren’t keeping up with inflation.
- By comparison, just 20% believe their incomes are keeping pace. That number is at its lowest level since September 2022.
Heritage Action for America Executive Vice President Ryan Walker lamented that Washington politicians appear disconnected from the economic struggles of many Americans. Speaking to “The Daily Signal Podcast,” Walker said Congress’ latest spending spree will negatively affect Americans’ personal finances. (Heritage Action is a partner organization of The Heritage Foundation, which founded The Daily Signal in 2014.)
“The American people see it at the grocery store, they see it on their credit card bills, they see it in their mortgage rates, they see it in their credit card rates. They experience this on a daily basis,” Walker said. “Many people in Washington, D.C., may be so disconnected from the struggles of the average person in their community that they don’t take those factors into consideration. And they should.”
While frustration mounts among everyday Americans, lawmakers in Washington will soon have spent more on foreign aid to Ukraine than the annual wages paid to every American manufacturing worker who produces motor vehicles, vehicle parts, and other transportation equipment. It’s also more than the annual wages paid to every American worker in all agriculture, mining, and oil and gas extraction industries, Stern calculated.
With the Senate set to approve $61 billion more for Ukraine—along with $34 billion for Israel and the Indo-Pacific—lawmakers have made no attempt to offset the additional spending. On its own, the $95 billion package would cost $730 per household.
Another $730 per household in brand NEW inflation taxes are set to hit once the “aid package” becomes law 🤦♂️
Never forget, the government has a monopoly on legal violence and doesn’t have any reason to care about your quality of life.
— Richard A. Stern (@RichAStern) April 20, 2024
“Every time the federal government spends money, it forcefully takes that money from hard-working Americans,” Stern explained. “Even if you don’t pay federal income taxes, you still pay through inflation taxes and slower overall economic growth.”
The consequences of profligate spending aren’t just reflected in the national debt, already at $34.6 trillion and growing at a record pace. Stern noted that high interest rates for mortgages, for example, force some Americans out of the housing market or make it more costly for others to buy a home.
When the government borrows money this way, driving interest rates higher, it does so by promising to tax someone else or print more money in the future, Stern said.
As the government is now planning to lift yet another $95 billion out of the economy, the storm clouds are gathering. Mortgage rates jumped 0.2 percentage points in just a week. Chase Bank CEO Jamie Dimon and other leading bankers see mortgage rates climbing to about 8% with credit card debt already at record levels.
“Never forget,” Stern said, “the government has a monopoly on legal violence and doesn’t have any reason to care about your quality of life.”
Rasmussen’s poll was conducted by RMG Research from April 3-4. It surveyed 1,000 registered voters and has a plus or minus 3.1 percentage point margin of error.
Originally published by The Daily Signal. Republished with permission.
For more from Budget & Tax News.
For more public policy from The Heartland Institute.