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From the viewpoint of the average American and business owners alike, the economy appears in dire straits with dim prospects for improvement. High inflation coupled with the threat of recession is leading to fears of stagflation—a scenario of stagnant growth paired with rising unemployment and prices. This fear is compounded by the fact that many believe we are already experiencing a recession, contrary to Treasury Secretary Janet Yellen’s claim that a recession isn’t just two consecutive quarters of negative growth—a statement at odds with conventional economic teachings.
Despite assurances of job creation, the reality on the ground is harsh. The majority of new positions are part-time (70%), with government roles making up another 20%. This raises questions about the nature and quality of employment being generated under the current administration.
The Biden administration has staved off economic collapse primarily through increased government spending and job creation in the public sector, both of which inflate national debt and only delay a potential fiscal crisis.
In some regions, minimum wages have soared to as much as $20 per hour, prompting many businesses, including retailers and fast-food chains, to exit these markets or shift towards automation like self-checkouts and order kiosks. Notable changes are also evident in the operations of companies like CVS and Walgreens, which have drastically cut back on staff.
ALERT! Major Water Restrictions In Effect!
Under what has been dubbed “Bidenomics,” the nation has seen a staggering 46% rise in gas prices, with mortgage rates approaching 7%. This has led to a significant downturn in mortgage demand.
Real wages, when adjusted for inflation, have decreased by $371 on average. The administration presents data showing declining inflation and rising wages since June 2022, giving an impression of recovery. However, cumulative inflation over the past four years has been about 20%, eroding purchasing power significantly. In essence, the real value of wages has declined, as evidenced by the widening gap between income growth and price increases.
Amidst these financial pressures, the American savings rate has plummeted from a pre-pandemic 6% to just 3.6%, and there’s a surge in credit card defaults and car loan delinquencies. Reports indicate that many are borrowing monthly merely to manage basic expenses.
The administration’s consideration of an interest rate cut could potentially trigger further inflation, exacerbating the economic woes—a situation that many would argue illustrates the failures of “Bidenomics.”
