Increased U.S. funding to help Ukraine defend itself against Russia could drive up inflation along with the national debt, according to an analysis by The Heritage Foundation’s top budget expert.
Members of Congress are negotiating a deal to pass President Joe Biden’s national security bill, which includes about $60 billion in funding for Ukraine as well as money for border security and for Israel in its war with Hamas terrorists.
“New Ukraine ‘aid’ bill would bring the total to over $173 billion, [which is] over $1,300 per American household and over $11,500 per Ukrainian household,” Richard Stern, director of The Heritage Foundation’s Grover M. Hermann Center for the Federal Budget, said in a post on X, formerly Twitter. (The Daily Signal is the news outlet of The Heritage Foundation.)
Biden, other Democrats, and some Republicans favor continued funding for Ukraine, which Russia invaded about 18 months ago. The House’s Republican majority argues that the Biden administration has failed to explain a clear strategy in Ukraine.
U.S. spending on Ukraine will increase both inflation and mortgage rates across America, Stern argues.
“If this new bill is implemented, our total aid to Ukraine will be more than the annual wages paid out to every American worker in all agriculture, mining, and oil and gas extraction industries,” Stern said in a thread on X. “Our total aid to Ukraine would be more than the annual wages paid out to every American manufacturing worker that produces motor vehicles, parts, and other transportation equipment.”
Stern noted that the spending will affect even Americans who don’t pay federal income taxes, because “you still pay through inflation taxes and slower overall economic growth.”
In other sectors of the economy, the Federal Reserve’s policy of printing more currency since the COVID-19 pandemic prompted increases in the cost of used cars, energy, food, and housing for Americans, Stern said.
He also argued that increased federal spending is driving up interest and mortgage rates while wages are sluggish.
“Bottom line,” Stern wrote on X: “More Ukraine aid will mean more Fed money printing and more federal borrowing that drives inflation and interest rates and starves the economy of the money needed for growth.”
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