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Dear Friend,

Americans generally expect to get richer. From one year to the next, incomes in the US have risen faster than the cost of living. Not any more.

While the average Mississippian in 2022 is many times better off than their great grandparents, will the next generation enjoy growing prosperity?

Soaring inflation means prices are rising far faster than incomes. In the 15 months that I have lived in Mississippi, I’ve noticed the price of everyday items rising rapidly.

Why are prices rising?
Firstly, the federal government has created way too many dollars. The more dollars that the Federal Reserve puts into circulation, the less that you are able to buy with the dollars you happen to hold.

Another reason for rising inflation is bad energy policy.

Prosperity depends on having a plentiful supply of energy. Energy is needed not only to power trucks and cars, or to keep our ac systems running. Cheap energy means more affordable food, clothing, travel and almost everything.

Tragically, government policy has set out to make energy more costly by restricting the use of fossil fuels. This, in turn, increases the price of everything from gas to groceries.

To make matters worse, the international situation means that there is now an embargo on Russian oil. However essential the oil embargo might be, imagine how much better placed the US would be to cope with it if the Keystone oil pipeline was now operational? Instead, the Biden administration cancelled it.

Another reason Americans have enjoyed rising living standards has been the growth in international trade. Being able to import products that others produce more cheaply meant that US consumers got a great deal.

With the Covid crisis and the invasion of Ukraine, we are starting to see a decline in world trade and a return to protectionism. This will mean a worse deal for US consumers and an increase in the cost of everyday items.

How should we respond?

I was interested to see the Liutenant Governor of our state call for a temporary removal of the gas tax. It might not necessarily hold down gas prices in quite the way intended, but lower taxes would be welcome by many Mississippians faced with rising bills.

The Speaker is, of course, advocating that we eliminate the income tax. That would be an even bigger long term help.

Politicians might be able to help Americans cope with the cost of living crisis at the margins. But the most useful thing that all of them need to do is step out of the way.

It is political interference in the energy market that has increased energy prices. It is monetary mismanagement by the fed that has fueled inflation.

What America needs to ensure rising living standards is less political interference, lower taxes and the free market.

In the video below, I discuss what lessons the US should draw from Europe’s energy policy disaster.

Have a great weekend!

Warm Regards,
Douglas Carswell
President & CEO

[link removed]
The Green Energy Disaster

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