Pandemic-era aid ended as prices spiked — and now the middle class is feeling squeezed again
That kind of turnaround is alarming for anyone going through it — and it may be the key to understanding why Americans have turned so sharply on this economy, posing a massive political threat to the Biden administration and Democrats in Congress ahead of this year’s midterm elections. The economy snapped back so quickly from the pandemic that people like Johnson are in a paradox: They’re worse off now, financially, than they were even when covid was a much more severe health threat, the national unemployment rate was almost twice as high, and economic growth was uneven.
By many measures, Johnson has vindicated President Biden’s economic policies. The cash from Biden’s American Rescue Plan stimulus program gave her $4,200 in stimulus checks — for herself and two kids — followed by big increases in food stamp assistance and a significantly larger Child Tax Credit. That helped her go back to school last spring, where she got a degree as a medical assistant. A better job, and higher pay, soon followed, treating dementia patients at a hospital nearby. Despite the recent decline, her savings are still technically larger than at any other point in her life.
But Johnson does not feel like an economic success story. Instead, she has a sense of acute loss for that fleeting period last spring where remarkable new financial opportunities appeared possible. Like the country overall, Johnson has slowly and steadily gotten poorer over the past year. Her expenses have soared due to the fastest inflation in four decades, and the many pandemic-driven government programs that supplemented her income have been eliminated one by one.
“It was a weight lifted like I can’t describe. I could actually buy what I wanted to at the grocery store,” said Johnson, 22. “But now I keep telling my boyfriend that I’m stuck. Living is so much harder now.”
The coronavirus — and attempts to mitigate its severity — severely damaged large sectors of the American economy when it first hit in February 2020, with unemployment spiking as schools and businesses closed their doors over the following month. But despite those severe shocks, the country’s economy emerged from the pandemic not only intact but propelled by a historic boom. Flush with cash from nearly $6 trillion in unprecedented federal stimulus, consumer spending exploded….