A new
report
by the liberal Urban Institute (âAs Inflation Squeezed Family Budgets, Food Insecurity Increased between 2021 and 2022â) reviews the negative effects of inflation on millions of American familiesâeven as it proposes a series of âpolicy actionsâ (read: massive spending increases) that would make that harm far worse.
As the report summarizes:
In 2022, inflation affected householdsâ grocery costs more commonly than other essential expenses, such as gasoline, home heating, child care, health insurance, and rent or mortgage costs. Although inflation rates have slowed in recent months, prices for groceries in December 2022 were nearly 12 percent higher than prices in December 2021. During this period, inflation also increased for rent and other common household costs, putting pressure on familiesâ finances, especially those with limited or fixed incomes. (emphasis added)
Hereâs more from the report on the specific harm Americans are experiencing as a result of rising prices for groceries, gas, and rent:
Rising Grocery Costs
In December 2022, more than 6 in 10 adults (63.2%) reported that their familiesâ grocery costs increased a lot in the last year. Prior research indicates that this likely increased the risk that these families may experience food insecurity and have insufficient economic resources to secure enough food for a healthy and active life.
Overall, we find that black and Hispanic/Latinx adults were more likely than white adults to experience food insecurity and use financial coping strategies in response to higher grocery costs in 2022, signaling that inflation could deepen racial and ethnic disparities in credit health and wealth.
Rising Gas Costs
In early 2022, families that relied on cars were also more vulnerable to price shocks stemming from increased gas prices, as in many parts of the US, a car is needed to maintain employment and access services. In December 2022, more than half of adults (55.5%) reported that their gasoline costs increased a lot in the last year
Rising Rent Costs
Additionally, increased inflation in housing costs placed additional pressure on renters. In 2022, about 1 in 4 adults in households that pay rent (26.2%) reported their rent costs increased by a lot, compared with nearly 1 in 12 homeowners (8.1%) who reported the same about their mortgage costs. Specifically, with surges in rent prices in 2022, prior research indicates that this may leave some families with uncertain housing circumstances and leave them at risk of being evicted or experiencing food insecurity.
Even though the
pandemic is over
, the
report
concludes by calling for a series of âpolicy actionsâ that would revive
pandemic-era government benefits
: providing more and bigger food stamp benefits (even as they
remain
at historically high levels), a renewal of universal âfreeâ school meals, and the restoration of the
2021 child tax credit expansion
, for starters. The reportâs authors also propose the creation of massive new entitlement programs, including expensive baby bond and even more expensive
universal basic income
programs (which the report euphemistically calls âdirect income supportsâ).
Thatâs a multi-trillion-dollar agenda that exceeds even the
wild-eyed spending
proposed in President Joe Bidenâs recent budget plan. Not only is that politically implausible, itâs also more of the runaway spending that even some Democrats argue
contributed to the high inflation
with which families are now struggling.
This kind of circular reasoning demonstrates that even as experts may correctly identify the harms everyday Americans are experiencing, they are not above proposing âpolicy actionsâ that would make those problems even worse.
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This article originally appeared in the AEIdeas blog and is reprinted with kind permission from the American Enterprise Institute.
