As you all know, inflation has been on the rise in the United States pretty much since Joe Biden assumed the White House and the Oval Office. He can blame it on the war in Ukraine all he wants, but the truth of the matter is that his decisions have led us to where we are today.
I’m not saying that the war hasn’t affected inflation or the American power grid energy crisis, as they call it. To be sure, since the war started and sanctions on Russia’s once plentiful oil resources began, crude oil and so gas prices have only gone up, which has only exacerbated the problem.
Thankfully, there are those within our government who have convinced Biden to make a few more recent decisions that have helped push gas prices down in the U.S.
According to July statistics and reports, both gas and inflation peaked for America in June, coming in at a national average of over $5 a gallon and 9.1 percent, respectively. Now, however, both have dropped a bit. Gas is now closer to $4 a gallon nationwide, and inflation has fallen to around 8.3 percent.
While the economy is still headed towards a recession, and our energy industry is nowhere close to where it needs to be, there are some things to be thankful for.
For starters, we can all be grateful we live here and not in Europe, where energy prices are still rising, as is inflation. And as winter and its colder months draw ever closer, things are only worsening.
Like here in the States, energy bills are still really pricey compared to previous years. But unlike here, in the UK, there doesn’t seem to be any signs of them either slowing down or even plateauing any time soon.
In fact, according to most experts, what costs £1,971 a year on average for energy by April of next year could amount to £5,816. And as those gas prices rise considerably, inflation will too. It is expected that by next year, inflation in the UK will sit at a rate of 18.6 percent.
Wholesale gas prices are already high. They rose by 25 percent last week alone. Similarly, electricity is up some seven percent. Together, this makes power prices for the winter months about 12 times higher than averages for the last decade.
In Germany, energy is in such high demand that the government has officially started rationing it, creating three-day work weeks. Russia used to supply about a third of Europe’s gas supplies. Now, only about 10 percent comes from the larger nations. Naturally, blackouts and rationing nationwide as winter approaches are the result.
As you can imagine, that will leave lots of people in “dire straits,” as a senior analyst at Hargreaves Lansdown, Sarah Coles, says.
She added, “And because these horrible price hikes are being driven by the essentials people need to stay alive – like food and heat – it’s going to hit those on lower incomes hardest, who’ve got nothing left to give.”
Coles warns that by April, those in the lowest 10 percent of earners could spend around 41 percent of their total income on energy bills alone.
The question then is what the government can and will do to help out those struggling the most and possibly even stem the rise in both. Of course, that takes us down a rather controversial and political path.
Now, the only real way to attempt to bring the rising inflation down is for governments to freeze gas prices and, of course, raise interest rates. However, some have suggested giving handouts to those in dire need.
Naturally, not everyone agrees with this idea.
Liz Truss, who is favored to become the next British prime minister following Boris Johnson’s upcoming departure, says she prefers tax cuts to handouts. But will this help, either? Some say it won’t have a lasting effect and is not the solution.
Whatever the case, it’s become clear that if the Bank of England and the nation’s economy survive this crisis, something will have to be done soon. As it stands, recession and years of makeup policies are already a must.