Blame (Mostly) Biden For High Prices

Ever wonder why things that cost $40 just a few short years ago now feel like they cost closer to $50? That’s because they do. According to the Bureau of Labor Statistics (BLS), things that would have cost $40 in July 2020 cost an average of $51.55 in July 2026. No wonder everyday Americans are concerned about affordability. In fact, per BLS figures, prices have risen more in the past 6 years than they did in the 14 years prior to that. Something that cost $100 in 2020 — just six years ago — now costs, on average, $128.88. That exceeds the price increase over the 14-year span from 2006 to 2020 — as things that cost $100 in July 2006 cost $127.32, on average, in July 2020. So, after years of having prices slowly creep upward, they have shot upward since 2020. The vast majority of the price increases since 2020 took place during the Joe Biden presidency. When Biden took office, the inflation rate was 1.4 percent. It rose to 9.1 percent less than 18 months later, and the overall annual inflation rate across his four-year term was 5 percent — the highest across any presidential term in the past 45 years. (That figure is based on the consumer price index for all urban consumers in January 2021 versus January 2025.) On the whole, $100 when Biden took office was worth only $82.34 by the time he left just four years later. Not since Jimmy Carter had Americans seen the value of their money drop so precipitously over a four-year span. Inflation during the Biden years was fueled in part by senseless Covid lockdown policies, which disrupted the supply of goods, and by runaway government spending, which flooded the economy with excess currency. As financial writer John Steele Gordon says, “As the price of money falls, the price of every other commodity must go up.” He adds, “And what causes the price of money to fall? The answer is very simple: an increase in the supply of money relative to other goods and services.” The Covid-era example fits this description: Lockdowns needlessly put a lot of (mostly smaller) companies out of business and limited the supply of goods, while the government went on a spending spree. Prior to 2020, the federal government had never spent $4.5 trillion in a single year (see Table 1.3). It then spent more than $6.5 trillion in 2020 — breaking the prior record by more than $2 trillion — and then upped that to $6.8 trillion in 2021, with Biden’s “American Rescue Plan Act” adding $1 trillion to 2021 spending by itself, per the Congressional Budget Office (see table A-1). Incredibly, in those two years alone (2020 and 2021), the federal government racked up more deficit spending ($5.5 trillion in constant 2017 dollars) than it had across the 43 combined fiscal years from the end of World War II through the 1980s (1947–1989), even after adjusting for inflation (see Table 1.3). With all of that extra borrowed money sloshing around, it’s no wonder inflation ensued. Following the blowout spending of 2020 and 2021, the government has yet to spend less than $6.1 trillion in any subsequent year or have less than $1.3 trillion of that be borrowed money. The national debt — fast approaching an astonishing $40 trillion — is now so high that, per the CBO (see p. 2), more than $1 trillion of Americans’ hard-earned tax dollars this year will go to paying interest on the debt — more than will go to discretionary defense spending ($885 billion) or discretionary non-defense spending (just under $1 trillion). In other words, huge chunks of Americans’ tax dollars are buying nothing tangible. They’re just the bill due for prior irresponsible deficit spending — a bill that gets higher each year. The inflation rate during President Trump’s second term has usually been under 3 percent and has cleared 4 percent in just one month (hitting 4.2 percent in May of this year). In other words, even Trump’s worst month was less than half of Biden’s peak of 9.1 percent and well below Biden’s overall average of 5 percent. Under Biden, Americans experienced 21 consecutive months of inflation that surpassed 5 percent, whereas under Trump inflation has never hit that mark (in either of his terms). The problem for Trump is twofold: First, inflation is higher now than it was before he commenced America’s undeclared war with Iran. After averaging 2.6 percent over the first 13 months of his second term, the inflation rate has averaged 3.6 percent over the past five months. Second, inflation is slightly higher now (3.4 percent in July, the most recent month available) than it was during the month when Trump took office (3.0 percent). The same things that propelled inflation to 40-year highs under Biden can potentially work in reverse under Trump. The federal government needs to stop spending so much borrowed money and exercise a modicum of fiscal restraint, especially when it comes to the “auto-pilot” spending (so-called “mandatory” spending plus net interest payments on the national debt) that is eating up an amazing 99 percent of our tax revenues (see p. 2). Only 1 percent of tax revenues are left for discretionary spending, so almost all discretionary spending utilizes borrowed money. And the government needs to encourage free-market competition and resist — and reverse — consolidation. When United Airlines approaches American and Delta about the possibility of a merger, it’s not because United wants to benefit Main Street. With many Democrats now openly embracing a declared socialism that’s hard to differentiate from communism, the Wall Street Journal’s Gerard Baker recently replied in a fine column that we need more — not less — of a free market. Baker blames our current economic woes on a version of “capitalism that has mutated into a system run by and for large corporate interests.” He laments the existence of “oligopoly-level industrial concentration in almost every sector,” “cronyism,” and hyper-regulation — in short, “the steady accretion of market, economic and political power by a business-political class that promotes its own well-being at the expense of competition, the market and ultimately the people.” When the Wall Street Journal is highlighting the pitfalls of consolidation, you know it’s a problem. The consolidation and centralization of money and power is the enemy of a free economy and a free people — and makes things less affordable. The way out is to embrace the American spirit of freedom and decentralized control, particularly emphasizing the economic freedom of the everyday American. As Americans continue to struggle with high prices due mostly to rampant Biden-era inflation, embracing these longstanding American principles is a key to limiting inflation going forward. Jeffrey H. Anderson is president of the American Main Street Initiative and served as director of the Bureau of Justice Statistics at the U.S. Department of Justice from 2017 to 2021. Donald TrumpeconomicsInflationJoe BidenPrices