Inflation will cost the average household an extra $3,500 or more in 2021

FEE’s Brad Polumbo writes, “The Wharton School of Business at the University of Pennsylvania ran the numbers to analyze what American households will have to spend in 2021 to maintain the same living standard from 2020 or 2019. Their analysis reports that 'inflation in 2021 will require the average U.S. household to spend around $3,500 more in 2021 to achieve the same level of consumption of goods and services as in recent previous years.'

The Wharton School of Business found that “inflation in 2021 will require the average U.S. household to spend around $3,500 more.”

You don’t need to be an Ivy League economist to see why that’s such an outrage. By @brad_polumbo https://t.co/4m27a7QLFd — FEE (@feeonline) December 16, 2021

That’s right: Thanks to the ongoing price inflation, families basically just got $3,500 poorer. The Wharton analysis also notes that lower-income households will be hit even harder by these price increases than higher-earning families, because lower-income families tend to spend relatively more of their money on particular goods that have seen the heaviest price hikes.

As families across the country are realizing, inflation is not just some abstract economic phenomenon. It hurts the finances of struggling Americans and makes it harder for families to put food on the table. But there’s another element of this that the public needs to remember: Today’s inflation is ultimately rooted in government policy choices.”

Read the entire column.