Inflation is having a tangible impact on the holiday dinner table. Research shows that this year, Americans will pay 15 percent more for their Thanksgiving meal.
A traditional dinner for 10, including turkey, bread stuffing, sweet potatoes, rolls with butter, peas, cranberries, a relish tray of carrots and celery, pumpkin pie with whipped cream, coffee, and milk or water to drink will cost $53.94 this year, according to our calculations. This is 15 percent higher than last year’s 10-year low of $46.90 and 9.87 percent higher than the previous 10-year average of $49.10, according to Statista.
Some Americans will choose to substitute chicken for the traditional turkey, as turkey prices are up between 20 and 24 percent, to make the meal more affordable. Some have even gone as far as to suggest that Americans forgo the protein altogether in order to make ends meet.
The cost to travel and spend Thanksgiving with family or friends will also be considerably higher in 2021. Based on current national averages: gasoline is up 61 percent; hotels are up more than 15 percent; airline tickets are up more than 24 percent; rental cars are up roughly 86 percent; new cars are up 9.8 percent; and the cost of used cars, SUVs, and trucks are up almost 26 percent year over year.
It’s Not Just The Supply Chain
Nobel Prize-winning economist Milton Friedman often referred to inflation as a “cruel tax.” He noted that inflation reduces a person’s purchasing power as more dollars are injected into the economy relative to output, making each dollar less valuable and harming the poor disproportionately. Not to mention inflation could place a person in a higher tax bracket, presenting a double whammy.
Current year-over-year inflation in the United States is running at 6.2 percent with states like Michigan running at roughly 6.5 percent, slightly higher than the national average. Midwest states are experiencing 6.6 percent inflation on average, according to the U.S. Bureau of Labor Statistics.
There is much debate as to whether this inflationary spike is transitory or permanent and how much of our current rising prices are caused by supply chain malfunctions or an increase in demand for a popular product or service. Or whether it is, as scholars like Friedman would argue, largely due to excessive government spending and monetary policy unleashed using the excuse of the pandemic.
One can certainly look at the more than $2 trillion the Federal Reserve has injected into the economy in the last two years and upwards of $8 trillion more designated or under debate to be spent as the root cause of today’s inflation surge. This excessive liquidity in the capital markets certainly validates many textbook explanations of why prices across the economy are increasing with no general explanation other than there is more money in the economy chasing the same or slightly more goods and services.
The rising price of Thanksgiving dinner and travel is evidence that excessive government monetary and fiscal policy is a problem here at Thanksgiving, much more than supply chain problems.
We hope at this time of year Americans reflect on the very meaning of Thanksgiving. With inflation at a 31-year high, many more people will need to depend on Thanksgiving generosity in 2021, so we must all do our best to reach out with treasure and time to enhance the Thanksgivings of others this year while enhancing our own meal by being thankful and giving.
We can only hope Washington finally acknowledges the “root cause” for inflation and fixes it by early 2022.
Dr. Daniel G. DeVos and Rep. Lisa C. McClain contributed to this report.