The Patriot Post® · RNC: The Truth About Bidenomics

By the Republican National Committee

INTEREST RATES CONTINUE TO RISE

• Biden claims that Bidenomics is just another way of saying “restoring the American dream,” yet his policies have made this dream increasingly out of reach for millions of hardworking Americans.
  • In March, Biden Treasury Secretary Janet Yellen confirmed that Biden’s inflationary spending set the stage for higher interest rates.
• Because of Biden’s failed agenda, more and more Americans are struggling to take out a mortgage, finance a vehicle, and perform various other financial transactions.
  • Faced with higher interest rates, business plans are being put on ice and Americans are agreeing to loan terms that would have been unimaginable just a year ago.
• This is a direct result of Bidenomics – Biden fueled inflation, which forced the Fed to raise interest rates.
  • Including today’s hike, the Federal Reserve has now raised interest rates 11 times since March 2022 with the goal of lowering inflation.
  • Interest rates are at their highest level in 22 years.
• The cumulative effects of these interest rate increases are squeezing Americans’ finances and punishing the cash-poor.
  • 61 percent of Americans said they took a financial hit due to rising interest rates in the past 12 months.

• Bidenomics has cost the middle class $2.4 trillion since March 2022.
  • The average middle-class household has lost over $33,000 in real wealth in just the past year.

BIDENOMICS IS MAKING IT HARDER FOR FAMILIES TO BUY A HOME

• For many people, including Biden himself, “the aspiration to own a home is connected deeply to the American dream.”
• Thanks to Bidenflation, working-class Americans face surging home prices and rising mortgage rates, leaving many unable to afford buying a home.
  • According to Freddie Mac, the average 30-year fixed mortgage rate has more than doubled since Biden took office, increasing from 2.77 percent to 6.78 percent.
  • When a 30-year fixed mortgage still averaged 3.1 percent, a borrower could get a $700,000 mortgage for monthly payments of $2,989 – that same mortgage taken out at a rate of 6.9 percent would equal a $4,610 monthly payment, which is $583,000 more over 30 years.
• Rising mortgage rates have caused homebuyers to lose $60,000 in purchasing power in just one year according to a recent report by Redfin.
• Homebuyers are increasingly being priced out of the market, denying them the ability to build wealth.
  • Retiree Gary Deuvall of Mississippi said “We’d hoped to build or buy a house. But interest rates are so high, that’s on pause. Meanwhile, I’ll just rent.”
• On top of higher mortgage rates, the Biden administration wanted to punish responsible Americans by forcing borrowers with good credit scores to pay an additional fee in order to subsidize riskier
  • This was only rescinded after severe backlash. 
• For families that cannot afford a house, rental options offer no protection from Bidenflation, with rent increasing 8.3 percent since last year.
  • 73 of America’s 100 largest cities saw month-to-month rent increases in June.

OWNING A CAR IS BECOMING INCREASINGLY UNAFFORDABLE

• The cost of a new car continues to rise, with the number of car buyers paying $1,000 or more a month to finance a new vehicle recently reaching an all-time high.
  • Roughly one in three car buyers are now taking out six to seven-year loans on used vehicles to help lower monthly payments.
    • In 2004, only 1 percent of auto loans lasted six to seven years.
  • These buyers are forced to pay higher loan rates as a result the Fed’s interest rate hikes.
    • The average loan rate in May was 7.1 percent for new car loans and 11 percent for used car loans – up from 5.1 percent and 8.2 percent a year earlier, respectively.
    • High loan rates mean higher monthly payments, with the average monthly payment to finance a new car recently hitting the highest on record.
    • The average used car loan is now 125 percent of the car’s value, which can leave borrowers owing more on a car than its present market value.
  • Higher rates are causing more drivers, particularly young drivers, to fall behind on their car payments according to a study by the New York Federal Reserve.
    • According to Cox Automotive data, May’s severe delinquency rate was the worst since at least 2006.
  • For those who can afford the average monthly payment of $736, they will pay nearly $9,000 in interest over the life of the average loan.
  • Meanwhile, rejection rates for auto loans are rising – recently hitting their highest on record – as lenders become increasingly cautious.
  • Americans who can afford a car must then face additional pain at the pump to fill up their tank, spending an average of over $1 per gallon more for gas compared to when Biden took office.

CREDIT CARD DEBT IS PILING UP

• The Federal Reserve’s interest rate hikes have caused credit card rates to increase as well.
  • When the federal funds rate rises, the prime rate follows suit, which credit card companies then use to set their own interest rates.
  • This means that cardholders who carry a balance month to month can expect higher credit card bills.
• The average credit card interest rate is now the highest since Bankrate began tracking credit card interest rates in the mid-1980s.
  • Credit card rates are one of the fastest ways higher interest rates hit consumers, because unlike car loans or mortgages that are fixed-rate, higher credit card interest rates get passed through “pretty much right away.”
• Meanwhile, credit card debt is already at a record high, and more people are carrying debt month to month.
  • Americans are increasingly relying on credit cards to help maintain their spending, and those who aren’t able to make ends meet “are just digging themselves a deeper and deeper hole with the higher interest rates.”

HIGHER INTEREST RATES ARE IMPACTING STUDENT LOANS

• Hardworking Americans who want to pay off their student loans, as well as those thinking about going to college, are getting pummeled by these higher interest rates thanks to Biden.
• Borrowers of private student loans with variable rates have been directly impacted by the Fed’s decision to raise interest rates.
  • Average interest rates on a 5-year variable-rate private student loan currently sit at 6.74 percent, up from 3.93 percent a year ago and up from a record low of 1.84 percent in 2021.
• While borrowers who already hold federal student loans are not affected by the Fed’s actions, new batches of federal loans will hold higher rates.
  • Borrowers with federal undergraduate loans disbursed after July 1, 2023 will pay 5 percent – just three years ago, rates were below 3 percent.
  • This is the highest level that most undergraduate borrowers have faced since 2013.
• Biden wanted to unilaterally cancel up to $10,000of student debt per borrower, a handout to the rich that would have cost taxpayers who didn’t go to college billions and worsened inflation.
  • According to the Penn Wharton Budget Model, Biden’s student loan bailout “could [have] exceed[ed] $1 trillion,” with the majority of the benefits going to the top 60 percent of earners.
  • The National Taxpayers Union Foundationpredicted that Biden’s bailout would have burdened the average taxpayer with roughly $2,500.
  • Experts warn that Biden’s plan would have encouraged colleges to raise tuition even higher, making the problem even worse. 

  Originally posted here.