Escalating Living Costs: Impacting All but the Politicians
In recent years, the rising cost of living in the United States has skyrocketed. From high housing prices to increased costs for healthcare, education, and basic necessities like food and transportation, the financial strain is felt by Americans across income levels. The average American needs an additional $11,400 just to be able to afford the basics. Yet, there appears to be a notable exception to this trend: politicians. This disparity of wealth highlights not only the economic challenges facing ordinary citizens but also the disconnect between elected officials and the constituents they are supposed to serve. This article will delve into the financial differences between the average American citizen and our politicians, showcasing that they are driven not by patriotism, but by personal gain.
This article is presented by the Middle Class Party, dedicated to cultivating a unified America through practical solutions and collective solidarity. Our mission is clear: to bridge societal divides and empower everyday Americans. Part of our ongoing series aimed at revitalizing the ideals of our founding fathers, this piece strives to uphold their legacy by addressing contemporary challenges with informed and pragmatic approaches.
Americans Are Broke
According to the 2024 Bankrate Survey, more than one-third (36 percent) of U.S. adults have more credit card debt than emergency savings. Even more dire, December 2023 polling shows that 44% of U.S. adults would pay an emergency expense of $1,000 or more from their savings. 35% would borrow money, including 21% who would finance with a credit card and pay it off over time, 10% who would borrow from family or friends and 4% who would take out a personal loan. Furthermore, if those polled were to lose their job, 66% of them would be worried that they wouldn’t have enough emergency savings to cover a month’s living expenses. Additionally, 10% of Americans have no credit card debt or emergency savings at all.
The personal savings rate was 3.8% as of January 2024, according to the U.S. Bureau of Labor Statistics. This is the percentage of an individual’s income after monthly spending and taxes. The Federal Reserve reports that the median amount in savings accounts per family is just $8,000. The country’s total household debt is at an all-time high – nearly $18 trillion.
It gets worse.
According to Marketwatch, 48.6% of Americans consider themselves to be “broke,” and 66.2% feel they are “living paycheck to paycheck.” This means that if something were to happen, such as unemployment or an emergency, bills could not be paid.
Nobody Intends To Be Broke
Nobody has a goal of being broke. Instead, this is the result of various factors.
A medical emergency that results in large medical bills.
Credit card abuse.
Poor financial decision making.
A lack of financial education.
Lack of proper budgeting.
And most importantly, inflation and the high cost of living.
The High Cost of
Living
For many Americans, the dream of financial stability is becoming a pipe dream. Housing prices are higher than at any time in the previous decade across the board, from expensive cities to small towns and rural areas. Homeownership is out of reach for many first-time buyers which has pushed rents to unprecedented levels, leaving half of Americans unable to afford rent.
Healthcare costs are surging. The United States spends far more on healthcare compared to other nations but does not have better healthcare outcomes. This leaves the average American struggling with affording health insurance, facing debt due to healthcare costs, and being unable to fulfill needed prescriptions.
The cost of obtaining a college education has risen significantly. Factors contributing to this rise include increased demand for higher education, reduced state funding, and escalating administrative and operational expenses. As a result, the annual tuition at some colleges now approaches a staggering $100,000.
Even day-to-day living expenses like groceries, transportation, and utilities have seen upward trends in pricing, stretching household budgets thinner. Inflation, though a normal economic phenomenon, has spiked to levels not seen in several years, exacerbating the cost of living crisis for many.
But rest assured, our elected officials are committed to serving our best interests. They too feel the impact of the economic challenges that confront everyday Americans. With an iron resolve, they are dedicated to working tirelessly to bring economic relief to their fellow citizens rather than increasing their own personal wealth.
I am joking, of course.
The Wealth of Lawmakers
In certain respects, politicians are similar to the average Americans that they serve. They have bank accounts, credit cards, and mortgages just like the rest of us. However, there are notable differences: politicians typically possess greater wealth, are required to disclose their investments publicly, and often have access to confidential information that can influence financial decisions.
For example, since at least 2021, more than 100 members of Congress have each executed over 10,000 stock trades annually. According to analysis by Motley Fool, these lawmakers tend to outperform the market, highlighting their significant trading activity.
Numerous lawmakers have engaged in timely trades of stocks within companies and sectors directly impacted by the legislation they craft and the committees on which they serve.
Members of Congress and their immediate family members are permitted to buy and sell stocks, with the stipulation that trades valued at $1,000 or more must be reported within 45 days, in compliance with the 2012 STOCK Act. Although insider trading laws are applicable to members of Congress, they are not barred from trading stocks in companies that could be influenced by pending legislation or that fall under the purview of their committee assignments. Additionally, the information acquired through their legislative duties may not necessarily qualify as insider information under current legal definitions.
Very convenient.
Unusual Whales, a financial data platform, reported that approximately 11,000 trades were executed in 2023, a decrease from the 12,700 trades in 2022. However, the estimated value of these trades exceeded $1 billion, based on the maximum disclosure amounts by members of Congress. This represents a significant increase from the estimated $788 million in trade values reported in 2022.
In 2023, Congress collectively outperformed the market. Democrats achieved an average return of 31.18%, while Republicans saw an average return of 17.99%, both comparing favorably against the S&P 500, which returned 24.23%. Notably, thirty-three out of the 100 members of Congress who engaged in trading surpassed the S&P 500's performance. Below is a list of the members of Congress with the best returns in 2023.
Rep. Brian Higgins (D-NY): +238.90%
Rep. Mark Green (R-TN): +122.20%
Rep. Garret Graves (R-LA): +107.60%
Rep. David Rouzer (R-NC): +105.60%
Rep. Seth Moulton (D-MA): +80%
Sen. Ron Wyden (D-OR): +78.50%
Rep. John Rutherford (R-FL): +69.10%
Sen. Richard Blumenthal (D-CT): +68.10%
Rep. Nancy Pelosi (D-CA): +65.50%
Rep. Pete Sessions (R-TX): +63.30%
Despite these financial gains and a substantial annual salary of $174,000—more than what over 80% of American households earned in 2022—many members of Congress still believe they are underpaid. Despite political polarization, there is bipartisan support for a $100,000 pay raise for members of congress, including the wealthiest members. Here is a simple chart from Visual Capitalist to illustrate the wealthiest public servants.
But it isn’t just the members of congress. Presidents have routinely used their position to massively increase their wealth.
Presidential Wealth Gains
Being president comes with a variety of perks, not to mention a $400,000 salary. But this is nothing compared to the millions they earn by monetizing their time in office.
This trend began with former President Gerald Ford, who was the first ex-president to monetize his presidential experience. Upon entering the White House, Ford had a net worth of $1.4 million and accumulated an additional $5.6 million before his death, according to a study by American University. This substantial increase in wealth stemmed from paid speeches, public appearances, and roles on the corporate boards of companies such as 20th Century Fox and American Express.
Since the tenure of President Ford, both presidents and vice presidents have significantly increased their wealth after leaving office, capitalizing on a mix of lucrative opportunities. These financial avenues include paid speaking engagements, book deals, consulting roles, and public appearances. Here is the current net worth of former presidents as well as current president Joe Biden:
Joe Biden: $8 million
Donald Trump: $2.0 billion
Barack Obama: $70 million
George W. Bush: $50 million
Bill Clinton: $120 million
George H.W. Bush (Deceased): $25 million
Ronald Reagan(Deceased): $13 million
Apparently, politics does pay, regardless of one’s time in office and approval rating.
The Disconnect and the Need for Reform
The growing economic divide between politicians and the public fosters disillusionment and distrust in the political system. The general feeling is that our leaders do not share our struggles nor act in the best interests of our citizens and our country.
We need meaningful reforms in how politicians are compensated and how they engage with the economic realities of their constituents. One potential reform is tying politicians' salaries and benefits more closely to the median income and living standards of their districts. Such a move could align their personal economic interests more closely with those of their constituents, promoting greater empathy and understanding.
Transparency in campaign financing and accountability could also reduce the financial disconnect, ensuring that politicians are not overly influenced by wealthy donors and special interests who may not represent the general population. Public financing of campaigns, stricter lobbying laws, and caps on campaign contributions are all measures that could help level the playing field.
We Need Action Now
As the cost of living continues to rise and the misery of the American people compounds, we must hold politicians accountable for policies that directly address these economic challenges. While the rising cost of living affects nearly every American, politicians often remain shielded from these hardships. This economic shield can lead to policies that do not fully address the needs or realities of the general populace.
This needs to change.
And only we, the people, can bring about this change.
Join Us
If you are frustrated with politicians overlooking our financial needs while enriching themselves, it's time to join us in driving change. The Middle Class Party is dedicated to a pragmatic platform, crafting policies that empower Americans and bolster our nation's resilience. Together, we can ensure that our government operates with the effectiveness and efficiency our citizens rightfully deserve.
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