The US is currently experiencing the highest levels of year-on-year inflation or increase in the consumer price index in over 40 years, that is 7.9%. Whilst there may be many factors that contributed to this super high inflation rate, what is for certain is the normal American is feeling its effects. Food prices, housing, and shelter prices have risen drastically. Gas prices have soared to a record high. On average they are $1.54 higher a gallon compared with this time last year. This also reflects the highest average gas price recorded in the US since July 2008. The current average gas price per gallon is $4.49 in the US.
COVID-19, Russia, And Ukraine War
According to The Gazette, President Joe Biden and his administration in the White House have cited reasons such as the COVID-19 pandemic and the recent conflict, or war, between Russia and Ukraine, as some of the main reasons for an increase in inflation and gas prices. However, the American president has denied that his $1.9 trillion spending bill has had anything to do with this. President Joe Biden stated at the National League of Cities Congressional City Conference in D.C: “Make no mistake. The current spike in gas prices is largely the fault of Vladimir Putin … it has nothing to do with the American Rescue Plan”. He further added that: “Rescuing our economy didn’t cause this problem, but we’re working to fix it”.
The American Rescue Plan
Furthermore, the $1.9 trillion American Rescue Plan which was brought into being by US President Joe Biden has no Republican support. It has supplied various COVID-19 pandemic-related unemployment benefits, extended child tax credit programs, and other stimulus packages. Whilst there have been both criticism and praise of the US’s federal relief packages during the COVID-19 pandemic, some people believe that such ‘artificial funds’ and added demand have been one of the contributors to the super high inflation rate in the US.
President Biden’s Analysis of Inflation
Whilst these initiatives were designed to speed up America’s economic recovery from, and during, the COVID-19 pandemic, some believe it has done otherwise. However, President Joe Biden is adamant that the American Rescue Plan has helped to rescue the economy and only had played, if any, a small role in increasing CPI. This can be demonstrated as President Biden added that analysts have indicated that the bill had only contributed to 0.3% of the current increase in CPI or inflation rate.