You’re paying more for food because Congress refuses to control its spending. That was the testimony I recently gave before a Senate committee, but the committee chair, Sen. Elizabeth Warren, refused to believe the evidence presented. Her plan is not to reduce government spending, but to drive your food prices even higher.

Ms. Warren, Massachusetts Democrat, and many other politicians are to blame for the inflation that has ravaged the American people over the last three years. Our representatives in Congress, along with President Biden in the White House, spent trillions of dollars we didn’t have — and that money had to come from somewhere.

It’s coming out of your wallet right now, through the hidden tax of inflation.

To finance the stratospheric federal deficits of the last several years, the Federal Reserve essentially created the money for the Treasury to spend. At first, that seems like a win-win scenario: The politicians can spend trillions of dollars, and the people don’t have to pay a commensurate amount of taxes.

But that’s an illusion. By creating all that money, the Fed devalued the dollar. By giving the newly created dollars to the Treasury, the Fed transferred wealth from the people to the government. There is no better definition of a tax than that.

The transfer of wealth is clandestine because it doesn’t happen all at once, and it doesn’t show up on your tax return or on a receipt. Nevertheless, every time you get sticker shock at the grocery store and pay your ever-rising food bill, you’re paying the hidden tax of inflation.

Politicians like Ms. Warren and Mr. Biden not only refuse to accept the blame for creating inflation, but are also busy trying to scapegoat others, with businesses being the favorite boogeyman of their political demonology.

Ms. Warren pontificated from the dais in the Senate hearing that food prices are up because of corporate greed and so-called price gouging. Serious allegations of collusion and price-fixing were casually thrown about without any evidence presented that such illegal activity was taking place in the food industry.

Instead, the evidence speaks to exactly the opposite: Businesses are simply passing their own cost increases on to consumers, and the Biden administration’s own data proves it.

Since Mr. Biden took office, cumulative inflation is about 19%, as measured by the consumer price index. Likewise, prices paid by businesses are also up about 19%, as measured by the producer price index.

The grocery store is paying more for the food on its shelves, so we’re paying more — it’s that simple. If these stores didn’t pass along their cost increases, they’d eventually go out of business.

In fact, the price increases paid by consumers have only just caught up to the price increases paid by businesses in the last several months. For nearly the entire period since January 2021, the cumulative increase in the PPI was greater than that in the CPI.

In other words, businesses have spent most of the last three years shielding consumers from food price increases. That’s why corporate profits in the food industry were lower in 2021 and 2022 than they were at the end of 2020.

While corporate profits are higher today, they’re not higher after adjusting for inflation. They’re down 4.2%. That’s almost exactly the same as the 4.4% inflation-adjusted loss for the average American’s weekly paycheck.

Your paycheck is larger, but it buys less. Likewise, corporate profits are larger, but they buy less too. In any meaningful sense, consumers and businesses are worse off because Congress and the White House confiscated trillions of dollars in value through the hidden tax of inflation.

Contrary to claims made by Ms. Warren and other politicians, corporations in January 2021 didn’t suddenly become greedier than at any point in the prior 40 years. What did happen at that time, however, was the big spenders took control of the levers of power, resulting in 40-year-high inflation.

The only way to stop inflation, including for food prices, is to reduce profligate government spending. If Ms. Warren and Mr. Biden have their way, however, next year’s federal budget will be even higher — and so will our grocery bills.

Originally Published by The Washington Times