The holiday season is a time of cheerfulness, goodwill, and hope despite lean times. Truthfully, my grocery bill for a loaf of bread, bananas, lettuce, and a few small toys yesterday nibbled at my holiday cheer. Inflation has been rising for a good part of the past 18 months, and the sting of lost purchasing power only grows sharper.

For a second year, dwindling real incomes threaten to rob Americans of the joy of the season and satisfaction derived from taking care of their families or giving a helping hand to those in need. Like last year, policymakers have no good solutions.

The consumer price index (inflation rate) moderated last month, rising by 7.1% in November from the year prior — down from 7.7% in October. Grocery bills were 12% higher in October, down slightly from last month. While prices for some categories declined — such as gasoline, beef, and chicken — others remained the same or rose, such as shelter, fuel oil, eggs, and bread.

However, all of these readings are markedly higher than in December 2021. Groceries rose at a pace of 6.4% then. How we long to see grocery bills cut in half or even return to pre-summer 2021 levels before the passage of the American Rescue Plan. On one hand, Biden’s signature bill swamped households with boosted unemployment benefits, stimulus checks, child tax credit payments, and other direct payments. On the other, it jacked up prices on gas, goods, and groceries. This was well before Putin invaded Ukraine.

The White House positions a tight jobs market as evidence that the economy is strong. Americans should be jubilant, the White House suggests. Instead, they are deeply pessimistic about the state of the economy because inflation has worn them down.

More concerningly, many Americans view opportunity and mobility as out of reach, which could have devastating long-term consequences for our labor market and widespread economic prosperity.

Lower real earnings leave people further behind. High interest rates are locking millennials out of homeownership. Older Americans, many on fixed budgets, grapple with inflation on everyday expenses. Middle and high-income households have lost trillions of dollars of wealth and nest eggs in the stock market this year.

Housing costs — which comprise at least a third of household expenses — are also moving in the wrong direction. Although the pain at the pump has eased, rent and mortgage payments are ballooning, increasing the pressure on individuals to provide basic necessities for themselves and their families.

To maintain the same quality of life, households are spending down savings and racking up credit card debt. The savings rate, which soared during the pandemic, has since plunged to below pre-pandemic levels. Debt balances are now $2.4 trillion higher than before the pandemic began. Rising interest on those debts layers new pressure onto household budgets.

Unfortunately, it’s a matter of time before delinquencies, foreclosures, and bankruptcies tick up. Already, car repossessions are increasing. Mortgage loan defaults are expected to surge over the next two years — from a low 1.6% to 11.3% in 2024 — reaching close to 2009 recession highs.

According to McKinsey’s American Opportunity Survey (AOS), “Increasingly, Americans believe the country is doing ‘a poor job of providing opportunities for all people’ both now and in the near future.”

If there was a silver bullet to inflation, Washington policymakers would have pulled the trigger by now. Instead, the left passed the Inflation Reduction Act, which is nothing more than a lump of coal in our stockings because it will do nothing to reduce inflation.

The next Congress and state legislatures have a chance to pivot to solutions that will not just bring prices down but lift workers up. Re-engaging labor force dropouts will increase our dwindling supply of workers, reduce upward pressure on the costs to deliver goods and services, and expand the tax base.

Some 12 million able-bodied people aged 18-59 are not even looking for work. Employment requirements for public aid were abandoned during the pandemic. It’s time for states to recondition benefits, particularly food stamps, on work and training.

In addition, it’s time to halt the war on entrepreneurship in America. Proposed federal regulations on independent contracting and franchising threaten flexible work arrangements — especially for women, seniors, and disabled people — and small business ownership. These are paths to independence, fulfillment, and mobility outside of traditional jobs. Reducing labor-related regulations overall, including occupational licensing reform at the state level, will remove hindrances for sidelined workers.

Lean times are upon us, but policymakers have a chance to widen the path to opportunity for workers now and in the future.