Inflation, Tariffs, your budget and the Administration's lies
Dear TAT readers,
Well, here we are, another week of watching the current administration dismantle our government, national security, constitution and for today’s essay, the impact on the household budgets of many Americans. The two most prolific, GOP false narratives in the last election, deportations and inflation, are neither solved nor better off than the Biden administration left them. Oligarchy is alive and increasingly aggressive within the current administration.
If working Americans feel as if they are struggling to afford their lives, the data says that there are good reasons for it. In the two charts below, we can see that our “average real hourly earnings” or what our actual buying power is, has dropped dramatically over time. In the bottom graphic, we can also see that the income for those in the high-income wage group has gained nearly three times the wage growth, compared to wages for those in the middle and lower classes over the decades. This one fact alone highlights the advantages given to those in the administration’s cabal of oligarchs and the high-income class directly beneath them. The rest of us are on our own when it comes to Congress supporting working folks, via legislation.
As we move deeper into this administration’s term, the prospect for working Americans continues to dim, while that the ultra-wealthy and the oligarchs above them, continue to aggressively expand the income disparity between the classes. There are plenty of reasons for this, but the primary reason is that congress has legislated the majority of tax benefits and specialized legislation, that supports this decades-long trend, to the elite wealth crowd. The only thing different with the current administration is that they are by far, the most dishonest and cruel administration in American history, regarding equal opportunity for all Americans.
In recent polling from the esteemed, Pew Research Center, most Americans are very concerned about their household costs, especially food and other essentials. The essentials most troubling are food, housing, health insurance and things like fuel to get them to work. As always in our nation dedicated to equitable freedom, the poor, undereducated and minority Americans suffer the most as prices rise and incomes remain stagnant. Not only are our wages relatively stagnant, but in terms of how much buying power, your hard-earned dollars have or what is called, “real wages,” are moving in the opposite direction for those of us under the 90% income bracket.
Real Wages
"Real wages are defined as the nominal wage adjusted for the price level, reflecting the purchasing power of income in terms of goods and services that can be bought. They are calculated by dividing the nominal wage by the price of goods, providing a more accurate measure of economic well-being than nominal wages alone."
- Sciencedirect.com
The chart above showing the compensation for CEOs is nothing more than salt-in-the wounds for most working Americans. Those CEOs, especially those who control limit the goods and services most Americans depend on, like healthcare, fuel, insurance etc., have quite reasonably become the villains of the working classes. A perfect example of such frustration was Luigi Mangione’s alleged murder of a heartless healthcare executive, responsible for cutting and denying services while raising prices. After the midterms when the most painful parts of the Big Ugly Bill go into effect, no one will be surprised if other such attacks take place.
In another Pew Research survey, the top issues most Americans are most worried about in our current political landscape, are financial or economic. The top three are healthcare, the national debt and inflation. The current selfish and cruel administration and Republican-led Congress are failing at all three.
For example, below is a chart to visualize the rise in your healthcare costs due to the OBBBA or rather, Big Beautiful BS Bill. Beneath that graphic is another that indicates how many will become uninsured, due to the OBBBA
The national deficit issue is another failure and largely due to the overt criminality of the administration combined with the effects, of the Big BS Bill. While the impact to our overall economy can be calculated within reason, the overt criminality, is far more difficult to assess. Some strong clues though could be estimated based on Trump’s first administration and what we have all witnessed since his January 20th inauguration. The administration treats the law, ethics violations, nepotism, soliciting bribes from major corporations and collectives of such, like the oil industry purchasing elimination of environmental restrictions via bribes called, “campaign donations.”
All things considered, for every illegal or nepotistic act, taxpayers will foot the bill. Of course, as we can see from OBBBA, it will be those of us under the 90% income line that do the paying, not the elite wealthy citizens and their businesses and tax havens. With manufacturing jobs already beginning to fade, this means that fewer of us will be paying more taxes, to keep the oligarch crowd unburdened with paying their fair share.
OBBBA will increase the deficit by $4.1 Trillion dollars over the next ten years while reducing the GDP, significantly as can be seen in the graphic above, from Yale. With another 10.1 million Americans projected to lose health insurance due to the bill, this will also raise the taxes on those of us who must foot the bill for billionaires.
And now, let’s talk about tariffs and protectionist economic ignorance by Trump and his subservient Republicans controlling both houses of congress. Yes, “Tariffs are a tax on all of us.”
Tariffs
"The price level from all 2025 tariffs rises by 2.3% in the short-run, the equivalent of an average per household consumer loss of $3,800 in 2024$. Annual losses for households at the bottom of the income distribution are $1,700."
- The Budget Lab
- Yale University
- April 2, 2025
This analysis from Wharton clearly models a loss of GDP over the long run, as well as a projected reduction in wages by 5%. When working Americans are already paying the way for the oligarchs and lesser billionaires, losing 5% of our wages while paying the taxes, masquerading as tariffs, greatly magnifies the financial pain and suffering on most Americans, already under stress from the ongoing post-COVID price-gouging. Who is to blame… well, it is a long list but most tragically, it is our family and friends who are under the spell of Republican propaganda.
The outright lies about tariffs and Trump’s economic policies are nearly endless. We certainly can’t forget the most prominent ones like, “no one will lose their healthcare,” “tariffs are not taxes,” or “manufacturing will come back to the US.” The lies told and retold by Republicans, echoed loudly by their network of parroting news outlets, have GOP voters, fully brainwashed about their own household finances. They are so stuck on talking points that they refuse to even believe their own bank statements that say things are worse off under Republicans.
Along this line of thinking, I would be remiss if I did not fully condemn the DNC for their failure to understand campaigning. They entire election cycle for the 2024 election, they allowed the GOP to establish their false narratives about inflation and the border. They never recovered and now, we’re stuck with another acutely dangerous GOP administration. The DNC is still worthless and the clock for the 2026 midterms is ticking.
Summary: "Many trade models fail to capture the full harm of tariffs. PWBM projects Trump’s tariffs (April 8, 2025) will reduce long-run GDP by about 6% and wages by 5%. A middle-income household faces a $22K lifetime loss. These losses are twice as large as a revenue-equivalent corporate tax increase from 21% to 36%, an otherwise highly distorting tax."
"Summary: Many trade models fail to capture the full harm of tariffs. PWBM projects Trump’s tariffs (April 8, 2025) will reduce long-run GDP by about 6% and wages by 5%. A middle-income household faces a $22K lifetime loss. These losses are twice as large as a revenue-equivalent corporate tax increase from 21% to 36%, an otherwise highly distorting tax."
- The Economic Effects of President Trump’s Tariffs
- Penn Wharton at the University of Pennsylvania
- April 10th, 2025
Finally, as that AI is already taking jobs once thought secure, it will be those of us who pay our fair share, that will bend our backs to breaking, if AI expansion continues to take jobs as forecasted by most economic experts. We must listen to these experts and stop listening to the corporations, politicians and oligarchs that will eventually treat what’s left of working America as little more than serfs.
It is long overdue that I wrap up this essay, so I’ll be quick about it. The bottom line here is that facts and truth matter. While that I have little faith in many politicians, I have absolutely no faith in Republican politicians in the Trump era. Not one campaign promise for the people has been kept and it is even less likely now that any will be kept. This entire administration and its party are kleptocrats seducing their voters with far-right culture wars. So long as those voters remain with their head someplace that it won’t require a haircut, the rest of us are at risk financially and from a national security perspective.
The Pentagon and IC/Intelligence Community have always seen our economy as a key element of our national security. It can be found in every single NSS, National Security Strategy in my memory. Throughout my adulthood, the environment has also been included in most NSS documents. With the GOP tearing down our environment, this will become another expensive “fix” after we rid ourselves of the thieves and insurrectionists now in office. There is no way around it my friends, there isn’t one damn thing good for America with this administration. The sooner they are rendered powerless, the less we’ll have to spend cleaning up their disaster (s).
I wish I could leave everyone with better news, but like I have often heard, “bad news doesn’t get better with time.” In this case, such bad news could cost us our republic.
Cheers for your week,
Paul