The rate of inflation has surpassed the increase in wages, effectively shrinking paychecks, and it will only get worse if the $3.5 trillion budget reconciliation bill passes, warns Stephen Moore, author of "Trumponomics" and senior economic contributor for FreedomWorks.
While the economy is strong as far as the GDP, businesses, and the stock market are concerned, inflation is hurting people's pockets, Moore told the John Solomon Reports podcast on Monday.
"Americans are really feeling pinched and squeezed by this inflation," the free-market economist said.
"[I]f we pass another four, five, six trillion dollars of debt, that's only going to make the inflation problem much, much worse," Moore said. "I mean, it's just more dollars chasing fewer goods means higher inflation.
"I am worried about it. The [Federal Reserve] is not sufficiently worried about it, I think they're behind the curve ... right now we have five percent inflation. I think it could go up to six or seven percent, which is really, really troublesome."
Recently, he said, "Joe Biden was crowing about the wage gains for workers and, 'You know they're up four percent.' Well, yeah, but if inflation is six percent, your paycheck's actually shrinking."
Moore explained that those hurt the most by inflation are the ones living on fixed incomes and making under $50,000 a year.
As inflation increases, there are still 10 million job openings in the U.S. that aren't being filled because people are being paid to not work, he said. After talking to the CEO of FedEx, which is "one of the 50 largest companies in the world, with over 100,000 employees," Moore found out that they have 20,000 job openings.
"I estimate that if we had cut the payroll tax last year, rather than increased all the unemployment benefits, we'd have about five million more people working today," Moore said.
"All of this debt and all this spending and all the taxing that Biden is doing will create a kind of hangover effect," Moore warned. "And that hangover effect is going to be, I think, felt next year or in 2023."
If Democrats pass the $3.5 trillion spending bill "anywhere near the form that it's in right now — with the massive tax increases, the massive assault on American energy, the massive increase in welfare benefits, the big increase in debt — all of those things, I think, will cause a financial crisis in this country," Moore fears.
Moore is asked by people how the economy could be so bad when the stock market is high. "I think that investors are betting that Republicans are going to be able to stop this," he says. "I hope they can, but I wouldn't bet my life on it.
"[R]ight now, we have an economy where the whole fate of the Western world rests on the ... shoulders of [centrist Senators] Kyrsten Sinema and Joe Manchin."
What scares Moore is that if Democrats "manage to pass this bill, it's not going to take years, it's going to take decades to undo this stuff."
An example he gave was paid parental leave, which would allow parents to take off work whenever their child is sick.
"I talk to employers now who say even with the unpaid parental leave, people don't show up," he said. "Imagine if you're paying people not to work and you can say, 'Oh, my kid had a fever this morning.' It's going to wreak havoc on the economy."
What are the chances, Moore mused, "if we pass paid parental leave, that we'll ever repeal that?"