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January 1, Here’s What the Fed’s Rate Hike Means For You

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The Federal Reserve raised interest rates by a staggering 0.75% this week — the largest increase since 1994.

Here are 5 ways the rate hike will affect Americans, according to The Hill:

#1 Monthly car, mortgage, and credit card payments will increase
The Hill noted that the Fed’s rate hike “translates down to higher rates in credit markets, mortgage markets and any industry that relies on financing plans to make payments.”

#2 Volatile stock markets
Since the Fed started hiking its interest rates in March, the Dow fell 12 percent, the S&P fell 16 percent, and the Nasdaq dropped 20 percent.

#3 It’ll be harder to find a job
“Price increases that shrink demand also have the effect of forcing companies to cut costs, and one of the first places they look to do that is in the labor force,” the outlet reported.

#4 A recession is becoming more likely
“I’m not as worried about a return to the inflation levels of the 1970s as I am about a deep recession that is going to bring inflation way down soon,” said Desmond Lachman, an economist at the American Enterprise Institute (AEI).

#5 The national deficit will be a bigger drag on taxpayers
“The government is going to have to pay out more in interest payments,” Lachman said. “On top of that, what’s going to happen in the progress that we’ve been making in reducing the deficit is also going to go, because as the economy tanks and goes into recession, it means the government’s going to collect fewer taxes.”  

“The wrong thing for the Fed to do was — especially after the Biden package of $1.9 trillion, 8 percent of GDP, the kind of fiscal stimulus that we’ve never had before during peacetime — the Fed just sat with interest rates at zero and then kept convincing itself that inflation was transitory and had nothing to do with the fact that the money supply had increased by 40 percent over two years. That was insane.”  

Finance

Governor Declares “State of Emergency” Over Bidenomics

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Georgia has entered a state of emergency, and it’s not due to a natural disaster. Governor Brian Kemp announced this state of emergency in direct response to the skyrocketing inflation hitting his state.

Taking actionable steps to alleviate the strain on his citizens, Kemp has initiated a temporary suspension of Georgia’s gas tax, aimed at lightening the load for the state’s drivers.

It’s set to run from September 20 to October 12. Based on the numbers provided by Kemp’s office, this tax hiatus is anticipated to bring Georgians a notable reduction of 31.2 cents per gallon for regular gas, and a 35 cent drop for diesel, as noted by the Georgia Recorder.

The root of this crisis? Governor Kemp doesn’t mince words, laying blame squarely at the doorstep of the Biden administration and the evident failures of its economic strategy, or as many are calling it, “Bidenomics”.

In a hard-hitting statement, Kemp voiced the frustrations of many: “From runaway federal spending to policies that hamstring domestic energy production, all Bidenomics has done is take more money out of the pockets of the middle class,” he said.

“While high prices continue to hit family budgets, hardworking Georgians deserve real relief and that’s why I signed an executive order today to deliver it directly to them at the pump. Working with partners in the General Assembly, we’ll continue to help Georgians weather the economic headwinds caused by this president, his administration, and their allies in Congress.”

To put the gas crisis in perspective: while many states are grappling with inflated gas prices, Georgian wallets are feeling the strain acutely. A mere year ago, in September 2022, the average price at Georgia’s gas pumps was $3.24. Fast forward to today and the average price has jumped by 33 cents, as cited by AAA.

With Kemp’s tax suspension in play, the price to fill a standard 15-gallon tank will drop to $48.87 from its present $53.55.

For those seeking a national overview, AAA reports the current U.S. average for gas is $3.86 a gallon. The steepest gas prices are haunting the West Coast, with Californians forking out an exorbitant $5.46 a gallon, and Washington residents not far behind at $5.05.

The inflating cost of living, spurred by rampant inflation, has taken its toll across the nation, and fingers are pointed at the Biden administration for its role in this fiscal tempest.

Offering insights on Fox News, Gov. Kemp expressed hope that his emergency measures would provide some respite for Georgians battling the repercussions of Bidenomics—a policy purportedly draining over $700 monthly from American households.

As our loyal readers, we encourage you to share your thoughts and opinions on this issue. Let your voice be heard and join the discussion below.


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Biden’s Food Stamp Expansion Drives Up Grocery Prices By 15%

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Recent moves by the Biden administration to bolster food stamp benefits by $1 trillion might be tied to a substantial 15% surge in grocery prices, a government watchdog’s findings suggest.

In an attempt to revise the nutritional standards of the Supplemental Nutrition Assistance Program (SNAP) in 2021, the Department of Agriculture expanded its scope by a remarkable 27% from the levels seen before the COVID pandemic.

This observation was put forward by the Foundation for Government Accountability.

From the span of 2019 to 2022, there was a more than twofold surge in program spending, skyrocketing from $4.5 billion in 2019 to an astonishing $11 billion in 2022, as highlighted by the recently released study by the government accountability organization.

Despite the expiration of some emergency provisions, spending reached $8.6 billion in March 2023.

Moreover, an upward trajectory of 5.8% is anticipated for the year.

This uptick in program scope is anticipated to set US taxpayers back by over $1 trillion in the coming ten years, as estimated by the Congressional Budget Office.

The watchdog group claims that the escalation in food stamp expenditure has spurred grocery prices and added to the inflationary pressure.

“USDA cooked their books to hike food stamp benefits by 27% — the largest permanent increase in program history. And they bypassed Congress to do it,” Jonathan Ingram, vice president of policy and research at the Foundation for Government Accountability, told Fox News.

“Data show the Biden administration’s overreach led to massive spikes in grocery prices. They’re feeding inflation, not stopping hunger.”

Official White House Photo by Adam Schultz (Flickr)

The research referenced World Bank’s retail scanner data post the 2008 Great Recession, indicating that with every 12.5% increment in per-capita food stamp spending, food prices surge by 1%.

Labor Department data, which the group analyzed, showed that between December 2019 and March 2023, prices of items like margarine and eggs surged by over 50%, while frozen vegetables saw a 36% price hike.

The Foundation for Government Accountability also posits that by retracting Biden’s expanded food stamp initiative, Congress could potentially recover upwards of $193 billion in taxpayer funds.

roots vegetarian and organic grocery store (2)

This heightened food stamp expenditure is poised to be a pivotal topic in the impending Congressional debates regarding the reauthorization of the Farm Bill, which dictates a spectrum of spending parameters — from food perks for city dwellers to facilitating rural broadband.

While Republicans are advocating for a curtailment in SNAP expenditures, Democrats tread with caution, especially in light of a recent agreement with House Republicans that necessitated work requirements for certain food stamp beneficiaries in exchange for the upliftment of the federal debt cap earlier this year.

As our loyal readers, we encourage you to share your thoughts and opinions on this issue. Let your voice be heard and join the discussion below.


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Taxpayer Alert: Lawmakers Approve $750 Monthly Handouts

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Durham County in North Carolina has set forth a new pilot program centered on guaranteed income, aiming to assist underprivileged families within its jurisdiction.

Christened “DCo Thrives,” this initiative secured unanimous support from the Durham County Board of County Commissioners during a recent session.

As a part of DCo Thrives, 125 selected families will be awarded a guaranteed monthly income of $750, followed by subsequent surveys to measure the initiative’s impact.

This move from Durham is in alignment with a series of other such programs that have been initiated across various U.S. cities.

The primary objective of these programs remains testing the potential and efficacy of universal basic income (UBI) — a concept advocating that a pre-determined amount of monthly income could lead to enhanced alleviation of poverty and an uplifted standard of living.

To further evaluate the program’s implications, another sample set comprising 125 individuals, who aren’t beneficiaries of the monetary grant, will be surveyed to juxtapose the results against those who did receive the $750 monthly boost.

Financial backing for DCo Thrives is sourced from $1.69 million secured from the American Rescue Plan Act — a COVID-19 relief bill passed shortly after President Biden’s inauguration.

Criteria for enrollment in the program stipulate that beneficiary households must encompass a child aged 18 or below and have an income level equal to or below 30% of the county’s median income.

In a statement to ABC 11, Chairwoman of the Durham County Board of Commissioners, Brenda Howerton, accentuated the program’s child-centric focus.

“Children cannot thrive. If their parents are not thriving and they don’t have a house to live in, if they don’t have food for their children, our children cannot thrive, and they cannot learn,” Howerton articulated.

Historically, this isn’t Durham’s maiden venture into UBI-aligned pilots.

A prior initiative titled “Excel,” initiated by the City of Durham last year, disbursed $600 monthly stipends to 109 formerly incarcerated individuals. Though this initiative culminated earlier this year, Durham earmarked $1 million in its budget for program continuation.

UBI’s proponents champion its potential in facilitating more feasible employment prospects due to diminished economic constraints.

They further believe in its capability to aid families in navigating healthcare and education hurdles. Conversely, UBI’s critics perceive it as financially unfeasible on a national scale, emphasizing the enormous tax implications it could trigger.

Andrew Yang, during his 2020 presidential campaign run, brought UBI into the limelight, labeling it as a “Freedom Dividend.”

The wave of UBI trials isn’t just domestic.

On an international scale, notably, an expansive UBI pilot is underway in Africa. Spearheaded by GiveDirectly since 2017, this trial has involved transferring funds to around 20,000 individuals across nearly 200 Kenyan villages. An additional 100 villages serve as a control group in this study.

As our loyal readers, we encourage you to share your thoughts and opinions on this issue. Let your voice be heard and join the discussion below.


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