Understanding the Impact of Inflation on Americans

The Stifling Effect of Inflation

Inflation not only affects Americans’ pocketbooks, but it also has a broader impact on opportunity in the country. Many believe that the economic troubles of recent years have been particularly challenging compared to previous generations. Even with positive reports on job growth and discussions of “soft landings” by economists, people tend to focus more on their personal experiences rather than macroeconomic measures. The majority feel that their incomes are not keeping pace with inflation, leading to a decline in their standard of living.

The American Dream and Inflation

A significant number of individuals, especially millennials and Gen-Xers in their prime working years, believe that their standard of living is worse than that of their parents. This sentiment contradicts the traditional notion of the American Dream. It has been nearly four decades since Americans experienced inflation to this extent. While older adults who lived through the inflation and gas shortages of the 1970s can draw some comparisons, even they recognize the unique challenges faced in recent years.

The Disconnect Between Micro and Macro

Despite positive macroeconomic indicators such as job growth, employment rates, GDP, and even inflation rates, people tend to prioritize their personal experiences over these figures. While the job market may appear strong, a staggering three-quarters of Americans feel that their incomes are not keeping up with inflation. There is a prevailing belief that economic opportunities are primarily benefiting the wealthy, not the middle class. The pandemic has further diminished the idea that “everyone has a chance to get ahead.”

Potential Solutions

Increasing interest rates as a means of controlling inflation is not widely supported, particularly among individuals in the lowest income bracket. Americans are also unwilling to accept higher unemployment rates, even if it means reducing inflation. To gauge public opinion, we posed the idea of government price controls, which received significant hypothetical support. Surprisingly, backing for price controls is not limited to one political party, with over half of Republicans expressing support.

The President’s Role in Controlling Inflation

A majority of Americans believe that the president has the power to control inflation. This perception has been consistent since the 1970s and 80s. While the complexity of the global economy and the multiple factors contributing to inflation make it difficult to accurately assess the president’s influence, public opinion will continue to hold President Biden accountable for high inflation. People primarily attribute inflation to international factors, suspicion of companies overcharging, and government spending.

Public Perception and the Economy

Public views of the economy remain broadly negative, with inflation being the primary reason for this sentiment. Partisanship also plays a role in shaping opinions. Throughout the year, a significant portion of the population has viewed the economy as “bad.” This reflects ongoing uncertainty about its overall outlook. President Biden receives significant disapproval for his handling of inflation, with many Americans believing that his administration’s actions have contributed to its growth rather than alleviating it.

Evaluating the Biden Administration’s Economic Policies

The Biden administration often highlights its legislative record on the economy, including initiatives like the Build Back Better Act and the Inflation Reduction Act. However, public evaluations of these policies are mixed. Many individuals, including those within the president’s own party, feel that they have not been adequately informed about these initiatives.

Read More of this Story at www.cbsnews.com – 2023-12-10 14:30:02

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