“Inflation is when you pay fifteen dollars for the ten-dollar haircut you used to get for five dollars when you had hair!”-Sam Ewing
Under the Biden administration, the role of government in the economy has undergone its biggest shift since Franklin Roosevelt’s New Deal in the 1930s. Rather than fear debt and inflation, policymakers are flooding the economy with dollars and spending programs.
Inflation is Crushing Americans
Inflation is the top issue for Americans. Most damaging for Biden and his party is that wages are not keeping pace with fast-rising prices. Grocery prices are up 13 percent from a year ago, the largest price increase in over 40 years.
The average family, with both parents working, has seen a $6,800 pay cut when wages are adjusted for inflation.
Consumer debt is at an all-time high as households deal with higher prices for food, clothing, gas, and rent. Credit card interest rates are about 20 percent for those with “good” credit.
The Fed Hikes Rates
The U.S. central bank has raised interest rates to their highest level since 2008. These rate hikes could trigger a serious economic downturn.
Brace For A Painful Recession
Amazon founder Jeff Bezos warns the U.S. economy may slump into a recession and people should brace for a painful downturn.
According to the Bloomberg Economics forecast model released on October 17, there is a 100 percent probability of a recession within the next 12 months.
In a September 26 interview with CNBC’s “Squawk Box”, Morgan Stanley’s Chief U.S. Equity Strategist Michael Wilson said that he is convinced the coming recession will be worse than a “normal” recession.
With one-party Democratic control of Congress, Biden has been able to secretly spend hundreds of billions of dollars without Congressional approval.
Billionaire entrepreneur Elon Musk said, “The obvious reason for inflation is the government has printed a zillion dollars.”
Low, stable inflation and interest rates have powered the economy for the last three decades. As this scenario unravels, the country is facing its most challenging years since the 1980s.
Photo by Veleno Veleno