The O-Conomy: How President Obama's Economy is Crushing the Middle Class
You know it is election season when you start hearing the phrase "middle class" in every sound bite from every candidate. Both the Obama and Romney campaigns are going to try to cast themselves as protectors of the middle class.
The reason for this campaign messaging is simple: everyone in America wants to think of himself as middle-class. The very concept of middle class fits into the Norman Rockwell depiction of the American experience.
While both sides are campaigning to capture the votes of the middle class, President Obama has gone on the offensive, accusing Governor Romney of stealing from the middle class to pay for tax cuts for the wealthy. What President Obama seems to forget is that the middle class is getting crushed under his watch by three millstones: gasoline prices, food prices, and household income.
Gas prices have gone up sharply under the watch of President Obama. In November of 2008, the average cost of a gallon of unleaded fuel in the U.S. was $2.151. The price of gas subsequently dropped to $1.689 in December 2008, and when the president was inaugurated in January 2009, the average price was $1.787 per gallon. We have not seen gas below $3.00 per gallon since December 2010. In 2011, the annual average was $3.527, and in 2012, the average so far is $3.652. According to a 2011 CNNMoney data analysis, the average American household spent $368.09 per month on gasoline. This is would equate to $4,417.08 over the course of the year. This is more than the $3,100 average that the Consumer Federation of America estimated in a study.
On June 24, 2008, Senator Obama said:
What Washington has done is what Washington always does - it's peddled false promises, irresponsible policy, and cheap gimmicks that might get politicians through the next election, but won't lead America toward the next generation of renewable energy. And now we're paying the price. Now we've fallen behind the rest of the world. Now we're forced to beg Saudi Arabia for more oil. Now we're facing gas prices over $4 a gallon - gas prices that are decimating the savings of families who are already struggling in this economy. Like the man I met in Pennsylvania who lost his job and couldn't even afford the gas to drive around and look for a new one. That's how badly folks are hurting. That's how badly Washington has failed.
This $4,417.08 gas bill hits hard when you look at the median annual household income, which was $50,945 as of June 2012. The rising cost of gas consumes approximately 8.67 percent of the household's income.
Four years after President Obama was elected, families are still struggling in this economy, and gas prices continue to consume a significant portion of families' income.
The rising cost of food also hits middle-class families directly in the pocketbook. According to the U.S. Department of Agriculture's Center for Nutrition Policy and Promotion's most recent data (June 2012), for the moderate-cost food plan for a family of four, the average cost per week is $236.60. AOL's DailyFinance.com explains not only how this impacts a family's bill currently, but how the rising food prices and recent drought are only going to make the matters worse.
The Department of Agriculture Center for Nutrition Policy and Promotion estimates a moderate weekly grocery bill for a family of four with school-age children at roughly $236.60, which translates into an annual family budget of approximately $12,300 for food consumed at home.
Assuming the anticipated 5% increase in food prices next year, a family of four is looking at an additional $615 on their annual grocery bill in 2013.
For dining away from home, if we assume the average American family of four's typical weekly restaurant bill is $100, or $5,200 per year. That 5% increase will add $260 to a family's restaurant spending next year.
All told, the unrelenting national drought could add up to an extra $875 on food spending for an average family of four.
At a minimum, the average family of four is looking at over $17,500 a year in combined grocery and restaurant bills. Using the same median annual income amount of $50,945, this means that the average family of four is spending 34.4 percent of its income on combined food costs.
During a growing economy, the rising cost for families at the dinner table and at the pump would be unpleasant, but American families are being forced to pay these higher prices and have much less money to do so than when President Obama was inaugurated. According to Sentier Research, in January of 2009, the median annual household income was $54,962. In June of 2012, the median annual household income was, again, $50,945. This means that since President Obama's inauguration, the exact middle family in the United States has lost $4,017 in annual income.
No president has complete control over the economy; however, what happens under the president's watch reflects his policies or lack of policies. Ultimately, as Harry Truman made clear, "The buck stops here!"
President Obama's socialistic and redistributive economic policies and failing energy policies have not put the economy on the road to recovery. New leadership and new ideas are needed. The middle class cannot survive another four years paying 43 percent of their diminishing income for food and gas.