Rand Paul: Federal COVID stimulus to blame for record inflation | national
(The Center Square) – Sen. Rand Paul, R-Ky., released a new report Tuesday detailing the effects of inflation on families and businesses across the country and calling it a “hidden tax” on Americans.
In the report, Paul blames federal COVID-19 stimulus spending for record inflation.
“$4.9 trillion in COVID-19 stimulus spending has led to one of the highest and most sustained levels of inflation in U.S. history,” Paul said. “While government stimulus spending was designed as a form of relief, and low- and middle-income families and small business owners were promised that their taxes would not rise, Americans around the world now pay a hidden tax called inflation.”
In particular, low-income families and small businesses have been hardest hit, according to the report.
“This report concludes that, although no formal taxes have been levied to pay for recent trends in government spending, a hidden and regressive tax has been levied on the American public, charging more to low- and middle-income families and to small businesses and less to wealthy families and large corporations,” the report says.
The report comes after record price increases in recent months. The Department of Labor’s Bureau of Labor Statistics released new inflation figures for December, showing the prices of goods and services rose at the fastest rate since 1982.
“The All Items Index rose 7.0% for the 12 months ending December, the largest 12-month increase since the period ending June 1982,” the BLS said. change since the period ending in February 1991. The energy index increased by 29.3% over the last year and the food index increased by 6.3%.
Meanwhile, consumer price index data released this month showed the fastest rise in decades.
“It was the sixth time in the last 9 months that it increased by at least 0.5%,” the BLS said. “Along with the housing and used car and truck indices, the home furnishings and operations, clothing, new vehicles and medical care indices all rose in December. As in November, the automobile and leisure insurance indices were among the few to drop during the month.
Small businesses have been hit hard by rising prices. The National Federation of Independent Business released a report last week showing that the recent spike in inflation is among the top concerns for small businesses.
The NFIB report found that 22% of small business owners consider inflation to be the biggest problem for running their business, a 20% increase from the previous year.
Paul’s report states that “82% of small businesses said they had raised prices in the past few months, 42% said they had raised prices by 20% or more,” while “45% of small businesses said they had taken out a loan to deal with inflationary pressures in the past year.
“Large companies reported consistent profit margins,” the report adds.
Paul’s report also highlights how higher prices for things like gas and food disproportionately affect poorer families.
“Lower- and middle-income families spend more of their income on high-inflation items, such as gasoline, used cars, and food,” the report said. “Families in the lowest income quartile spend almost 40% of their annual income on these three categories. By comparison, families in the top quartile only spend 10% of their annual income on these categories.
Paul said prices will likely only go up.
“Over the past few months, the prices of almost everything, from gas, food and clothing to electricity, car prices and rent, have all gone up, and unfortunately that will only get worse,” Paul said. “Congress needs to realize that further spending in this time of rapidly rising prices will only continue the upward trend in prices for already vulnerable businesses and families in this country.”