Biden is tanking the US economy. Ten facts explain what is going on, how Biden’s incoherent economic policies are affecting all Americans, and what to expect. Is recession inevitable? No. Is it becoming likely? Yes.
First, the elephant in the room is inflation. A gallon of gas nips six dollars, edges seven in California. Annual inflation jumped to 8.6 percent in May, outpacing forecasts, the highest since 1981 – will continue.
Sector and commodity prices are telling. Nationally, gas is up 49 percent, fuel oil 106 percent, natural gas 30, high-protein foods like meat, fish, and eggs up 14 percent, food up 10 percent, and electricity 12 percent.
Pause for reality-identification: The electric car craze may slow when people realize electricity in those fancy e-pumps comes from the power grid. The grid is 60 percent run by fossil fuels, the other 40 half nuclear and half renewables.
The more you buzz about electricity, the more oil and gas – and uranium – get used. And the holy grail of wind and solar is pumped up by Biden-Harris-Kerry, exactly nine percent and three percent, respectively.
Note that seniors are hit harder and use more high inflation commodities such as oil, high protein food, electricity, medicines, and things requiring high energy inputs; therefore, Biden’s inflation hits seniors the hardest.
Second, consumer confidence is vital. Why? Because consumption drives the economy, all growth, jobs, innovation, and real wage hikes. How is that doing? Down in May, with inflation and interest rising. University of Michigan survey showed confidence at an 11-year low.
Third, consumer actions are key. Private studies note that Americans are concerned about savings and making regular payments, such as credit cards. A third is now worried, and the number is rising, which is not good.
Fourth, the Federal Reserve is responding to inflation as if driven by growth, which is awkward since growth is only fast by comparison to COVID times, or phantom growth. The Reserve just raised rates “75 basis points,” three times what they signaled. The prediction is rates will now “rise throughout the year.”
What this means is simple – the price of borrowing for anything, homes, cars, schools, clothes, and credit cards will rise. Prices rise not just from inflation but interest rate hikes. This is all a response to Biden’s inflation, driven by an indefensible energy policy and mass overspending.
Things begin to cascade. Inflation, with falling confidence, lower consumption, and higher interest, which also means higher interest in our $30 trillion national debt, will surely trigger higher unemployment or negative growth, that is, a recession or perhaps stagflation.
Fifth, talk about unemployment. Biden and congressional Democrats first gave away COVID relief, much of that disappearing and spent elsewhere, then doubled unemployment benefits – making it better to stay home. This meant fewer people looking for work, causing wages to go up artificially, and again, damage done.
Unemployment is based on jobs open for those looking – not those on the sidelines. So, as all this adds up, a wave of higher unemployment is coming, more people looking, jobs drying up under the pressure of high-interest rates, lower consumption, and tightening of belts.
Sixth, the real estate market has been hot – but is cooling. People fled unruly and rioting cities, resisting “defund police,” – but now interest rates are high, and mortgages will get expensive. Good? Hardly.
Seventh, energy hits everything – and Biden shut down big parts of the sector, reversing energy independence. That drove shortages, price hikes, and inflation, but also hit other sectors like fertilizer (petroleum based) and diesel (used in trucking). Biden’s war on oil is a war on consumers.
Eighth, Congress bears blame with Biden. Overspending is – independent of extra benefits and earmarks – out of control. Congress dumped another $3 trillion into debt, which cheapens the dollar, creates waste, takes private money, and adds to bureaucracy.
Ninth, Biden reversed Trump’s deregulation, putting a new drag on the private sector every day, restricting property rights, income, and jobs. Hundreds of new regulations suffocate job creators.
Tenth, public trust in government is vital, especially for economic decision-making. From taxes to regulation, incentives to forward planning, predictability, and truth are key. Biden has eroded that fast as he pushes fiction as fact and jars investors.
Examples are legion. Biden has soft-shoed his ties to China, pretended killing pipelines was irrelevant, said inflation is “worse everywhere but here” (totally false), Russia’s fault (false), no overspending (false), solved COVID deaths, bad recovery numbers, etc.
In short, the Biden White House, aided by congressional Democrats, is tanking the US economy. Is recession inevitable? No. Are the odds increasing? Yes. Will this bear on midterms? Take a guess.