How will inflation affect voter decisions in the midterms?

The economy is a major issue heading into the midterm elections, with one NYTimes/Siena poll showing 44% of voters say inflation and the economy are the most important issues facing the country. This means that it will play a role in the voting booth, but how much remains to be seen. WHAT IS INFLATION? In September 2022, the inflation rate will hit 8.2%, meaning that prices across a wide range of consumer goods and services will rise. year to year. Inflation describes how much the prices of goods and services rise over time. This is linked to supply and demand, meaning that if the demand for goods and services increases but their supply is low, their prices will rise. Low inflation is considered healthy for the economy, around 2% annually. When inflation becomes too high though, as in the current case, it can damage the economy, causing economic difficulties as prices eat into budgets and lower profits. Why is it happening now? The causes of inflation are multifaceted and often happen simultaneously. Experts point to several key reasons for high US inflation. COVID-19 lockdowns during the height of the pandemic caused many to stay at home and shelter in place. This means that Americans spend far less money. When businesses close, many are laid off. Unemployment reached a record high of 13% during the second quarter of 2020. As the COVID-19 vaccine arrived and cases began to decline, many restrictions eased, allowing people to go outside and start spending again. There is a rush from consumers to take advantage of goods and services denied during the pandemic, such as vacations and meals. Government aid in the form of stimulus checks, unemployment payments and child tax credits also pumped more money into the economy. This creates a surge in demand. However, the supply lagged behind. Businesses that have recently reopened face a mountain of challenges to provide goods and services to customers after the pandemic. On top of staff shortages driven by sick workers and changing work patterns, supply chains have also been disrupted. The pandemic that has disrupted supply chains, as well as the war in Ukraine, has put additional pressure on key resources such as gas and grain. Continue the COVID-19 lockdown in China, a key exporter in the global supply chain. How does it affect people? All those factors add up to create a hot inflation economy that hurts the most vulnerable Americans. After the financial turmoil caused by the pandemic, inflation is causing more stress for American families. Tanya Parus, a Sarasota County, FL, mom of 2 said she has had to change her grocery shopping habits to accommodate inflation. .Daniella Knight, an Annapolis, MD, mother of three has also been hit hard by inflation. “All our costs have increased,” he said. Not only families but also small businesses are affected. State Director of North Carolina Small Business Technology Development Center Byron Hicks said inflation is cutting into margins. “Small businesses work on very small lean margins. Raw materials are higher, fuel prices rise, and small businesses cannot raise their prices as quickly as corporations,” he said. HOW IS POLITICS RESPONDING? The whole world is experiencing an inflationary crisis right now, with countries like the UK and Turkey facing higher inflation rates than the United States. . A July YouGov poll showed that 45% of voters gave President Biden most of the responsibility for inflation, and 28% gave him the most responsibility. Given how important the issue is to Americans, both parties are doing what they can to encourage voters before November 8. The Republican candidate placed the blame on the Biden administration’s spending policies, and claimed stimulus spending during the pandemic made things worse. There is some truth to this claim, as some economists estimate that pandemic spending has caused between 1 and 4% of inflation. Many families need stimulus money to survive the pandemic, including Ms. Knight. “If we don’t get stimulus or unemployment, then we won’t survive, we won’t survive… Our youngest won’t be able to enter kindergarten,” he said. When Democrats discuss the economy, they mention the Landmark Inflation Reduction Act that was recently issued as a solution. Two studies have shown that the bill is unlikely to affect inflation in either direction, but instead will lower some costs like the price of prescription drugs and lower the national deficit. greed. Economists are undecided about whether rising profits have added to inflation. Given how big the problem of inflation is, Americans should vote with the economy in mind. Who can handle the challenge better is up to the voters to decide. What can be done about it? The hard truth is that little can be done by the government due to inflation. Power rests mostly in an independent entity that is the Federal Reserve. The Fed has the power to raise and lower interest rates in order to stabilize the economy, and keeping the economy stable is its only job. The Fed has introduced a series of interest rate hikes in an effort to slow down the economy and decentivize spending. This is starting to work, especially in the housing market that has seen high loan costs. The government has little recourse for action against inflation. Some of the tactics they can implement include raising taxes, eliminating import tax rates, limiting prices and cutting spending. Ultimately, the solution to limiting inflation relies on the federal reserve and global market behavior, not on politicians.

The economy is a major issue heading into the midterm elections, and one NYTimes / Siena polls show 44% of voters say inflation and the economy are the most important problems facing the country. This means that it will play a role in the voting booth, but how much remains to be seen.

WHAT IS INFLATION?

In September 2022, the inflation rate hit 8.2%, meaning that prices on a large number of consumer goods and services are rising every year. Inflation describes how much the prices of goods and services rise over time. This is linked to supply and demand, meaning that if the demand for goods and services increases but their supply is low, their prices will rise.

Low inflation is considered healthy for the economy, around 2% annually. When inflation becomes too high though, as in the current case, it can damage the economy, causing economic difficulties as prices eat into budgets and lower profits.

Why is it happening now?

The cause of inflation is multifaceted and often happens simultaneously. Experts point to several key reasons for high US inflation.

COVID-19 lockdowns during the height of the pandemic caused many to stay at home and shelter in place. This means that Americans spend far less money. When businesses close, many are laid off. Unemployment hit a record high 13% in the second quarter of 2020.

As the COVID-19 vaccine arrived and cases began to decline, many restrictions eased, allowing people to go outside and start spending again. There is a rush from consumers to take advantage of goods and services denied during the pandemic, such as vacations and meals. Government aid in the form of stimulus checks, unemployment payments and child tax credits also pumped more money into the economy. This creates a surge in demand.

However, the supply lagged behind. Businesses that have recently reopened face a mountain of challenges to provide goods and services to customers after the pandemic. On top of staff shortages driven by sick workers and changing work patterns, supply chains have also been disrupted. The pandemic that has disrupted supply chains, as well as the war in Ukraine, has put additional pressure on key resources such as gas and grain. Continue the COVID-19 lockdown in China, a key exporter in the global supply chain.

HOW DOES IT INFLUENCE PEOPLE?

All those factors add up to create a sweltering inflationary economy that hurts the most vulnerable Americans. After the financial turmoil caused by the pandemic, inflation is causing more stress for American families.

Tanya Parus, a Sarasota County, FL, mom of 2 said she has had to change her grocery shopping habits to accommodate for inflation.

“Unfortunately I don’t think I can afford to eat like we used to eat before,” she said.

Daniella Knight, an Annapolis, MD, mother of three has also been hit hard by inflation.

“All our costs have increased,” he said.

Not only families but also small businesses are affected. North Carolina State Director Small Business Technology Development Center Byron Hicks said inflation is cutting into margins.

“Small businesses work on a very small slim margin. Raw materials are higher, fuel prices rise, and small businesses cannot raise their prices as fast as corporations,” he said.

HOW DO POLITICIANS RESPOND?

The whole world is going through an inflationary crisis right now, with countries like the UK and Turkey face a higher inflation rate from the US That being said, when the economy hurts voters, they often turn the blame on the responsible government. One of July YouGov polls show that 45% of voters give President Biden most of the responsibility for inflation, and 28% give him the responsibility. Given how important the issue is to Americans, both parties are doing what they can to sway voters before Nov. 8.

The Republican candidate placed the blame on the Biden administration’s spending policies, and claimed stimulus spending during the pandemic made things worse. There is some truth to this claim, as some economists estimate that pandemic spending has caused between 1 and 4% of inflation. Many families need stimulus money to survive the pandemic, including Ms. Knight.

“If we don’t get stimulus or unemployment, then we won’t survive, we won’t survive… Our youngest won’t be able to attend preschool,” he said.

When Democrats discuss the economy, they cite the recently enacted Landmark Inflation Reduction Act as a solution. Two studies has shown that the bill is unlikely to affect inflation in either direction, but instead will lower some costs such as the price of prescription drugs and lower the national deficit. Some Dems also claim that amid record corporate profits, corporations are adding to inflation by raising prices in an act of greed. Economists haven’t decided whether rising profits have added to inflation.

Given how big a problem inflation is, Americans should vote with the economy in mind. Who can handle the challenge better is for the voters to decide.

What can be done about it?

The hard truth is that there is little the government can do to deal with inflation. Power rests mostly in an independent entity that is the Federal Reserve. The Fed has the power to raise and lower interest rates in order to stabilize the economy, and keeping the economy stable is its only job.

The Fed has introduced a series of interest rate hikes in an effort to slow down the economy and decentivize spending. This is starting to work, especially in the housing market that has seen high loan costs.

The government has little recourse for action against inflation. Some of the tactics they can implement include raising taxes, eliminating import tax rates, limiting prices and cutting spending. Ultimately, the solution to limiting inflation relies on the federal reserve and global market behavior, not on politicians.

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