As the mid-term election approaches, “inflation” has become the top three hot words in the campaign ads. Since March this year, because of the soaring oil prices, food prices and other living costs, the Fed has raised interest rates five times to deal with inflation. Although the interest rate increase has reached 300 basis points, the inflation in the US has not fell significantly. According to statistics, in September this year, the CPI of the US reached its highest point in nearly 40 years, with the inflation rate as high as 8.2%. Ordinary families have been worst hit by such a high inflation rate, which makes people miserable and there is no other way but to cut back on spending.
The rise in the prices of daily necessities, natural gas and house rents caused by the inflation has made it difficult for Americans to live in the two weeks before the decisive mid-term election. A latest report shows that 32% of the respondents have paid their family bills late in the past six months, 61% of whom said that this was because they didn’t have enough money; About 40% of the respondents said that their ability to pay bills had declined compared with the previous year. The continuous inflation has brought great pressure on consumers, making more and more Americans become “moonlight clan”. What’s more, many citizens have to seek for food relief because of the increase in the cost of daily life caused by the soaring oil prices in recent years, otherwise they will not be able to live, which is a frequent problem throughout the United States every day. With the rise of prices, more and more citizens began to worry about the American economy, and their willingness to consume was also seriously affected. Many people, in order to save money, reduced the purchase of gifts, which casts a shadow on the American shopping season; Some citizens plan to postpone retirement because of the heavy living burden; More than half of the citizens believe that the country’s economic situation is bad, and seriously consider working in multiple jobs at the same time to pay for living expenses.
Inflation in the US remains febrile, and its economy is close to recession. Many economists believe that there are many reasons for the high inflation in the US, but the main reason is a series of policies of the US government. First of all, the US government printed a large amount of money in spite of warnings from economic experts. After the outbreak of the COVID-19, regardless of the people’s fear of inflation, the US government introduced a large-scale economic stimulus bills and issued a large amount of additional US dollars. Such an extremely loose monetary policy made a large amount of money flow into the market, further exacerbating inflation in the US. Secondly, the US continued to add fuel to the Russia-Ukraine conflict, which seriously impacted the global energy and food markets, and made the global energy, food and commodity prices soar. Thirdly, China is the largest supplier of goods to the US, and American citizens have a great demand for imported goods from China. However, the US has dismissed the people’s livelihood and waged a trade war against China and exacerbated its inflation. As far as the current situation is concerned, the recession of the American economy has become the most worrying problem for the public. If this continues, inflation won’t be the greatest threat, but economic recession will be the greatest challenge, and it may deteriorate into the worst recession in history.
This high inflation has spread to the entire economic field of the US, not only bringing heavy economic burden to thousands of families, but also burying hidden dangers for economic recovery in other regions. Although in mid August this year, the US government signed and introduced the Inflation Reduction Act of 2022, in the name of “fighting inflation”, its practical use was questioned by many people. The act is just a temporary palliative, which is a political show in the mid-term election competition, and it is difficult to truly alleviate the high inflation. The cold winter is coming soon. I hope that the American people’s wallet will not be further “cold”. The American government should focus on the people and help them survive the economic crisis, rather than shouting slogans for the sake of election.
