Newsline

Economy , Newsline

Democrat-Led Economy Tanking

Posted on Wednesday, September 8, 2021
|
by AMAC, Robert B. Charles
|
83 Comments

Biden’s economy – all distracting happy talk aside – seems to be tanking. Although reading economic crosscurrents is like tracking water flows in a whirlpool, you can feel the shift. Why?

First, as the Wall Street Journal just reported, “US hiring slowed sharply in August.” Economists predicted 720,000 in job growth – Biden got 235,000. While the “delta” variant did not help, that is only half the story. See, U.S. Hiring Slowed Sharply in August – WSJ.

As job growth slows – and has since January – labor demand is still high. Why? Obvious reason is something not right in our labor market. July labor data showed us 5.7 million jobs below early 2020.

Why? No rocket science needed. The Biden team and congressional Democrats – aiming to buy votes, widen dependency, force higher wages on struggling employers – has pumped extra federal unemployment money into the national labor market, big checks on top of state benefits.

Paying people to do nothing has had a predictable effect. With an added $600 federal benefits per month, then $300, on top of COVID checks, people stay home. While this can be reversed, Democrats seem intent on dragging the labor disruption forward for as long as possible.

Add non-income Democrat benefits, like a presidential extension of an “eviction moratorium” – struck down by the Supreme Court two weeks ago, educational loan forgiveness, federal child tax credit expansion, other free goodies, and you see why people are slow to return to work.

In this category, get ready for more distortions – as Democrats now push mega-spending bills as “infrastructure.” These so-called “infrastructure” bills are minimally roads, bridges, airports, and ports –mostly big, unjustified, unaccountable federal spending – and more federal dependence.

As Kimberley Strassel recently wrote, these bills fund “Medicare expansion, the Green New Deal, and huge new family and education entitlements,” and if law “may be the largest expansion of the federal government in US history.” See, WSJ OPINION: POTOMAC WATCH BY KIMBERLEY A. STRASSEL.

All this is bad news for the economy. On top of labor distortions and wild benefits, more looms.

Second crosscurrent: Accelerating inflation. A second-order impact of mass spending – is inflation. Call this the monster that ate your dollar. As federal spending explodes, dollars are borrowed and printed.

Currently, the US has a $28.7 billion-dollar national debt. This year’s wild spending – which cannot be covered by taxes – pushes more debt, more borrowing, on which we pay more interest, creating more debt. Inflation is the obvious effect of such irresponsible fiscal behavior, reducing the dollar’s value.

Third crosscurrent: Elevated taxes. Two kinds of tax increases are coming, obvious and hidden. The obvious is a Democrat pledge to raise taxes, pretending to cover mass spending. Problem is, no chance. As the economy slows, tax base shrinks, so that is a head fake. Taxes will not cover their spending.

The other tax is sneaky, hidden. It will hit seniors on fixed incomes, middle-class holders of credit cards, and mortgages. As spending, debt, inflation, and declared taxes rise, the indirect tax of higher inflation will come. We will pay more, fuel to groceries, dollars earned have less value. That tends to trigger panic reactions, fewer savings, and unions pushing irrational wage increases.

Fourth crosscurrent: Falling consumption. All this causes employers to pull back. They do not hire if labor costs go too high, instead of cutting hours and jobs. With fewer jobs, people earn less and what they earn is worthless.

What does that do? Think about it – it naturally reduces what the economy is producing and what people can spend. In other words, it reduces consumption, with fewer people having money to spend. That, in turn, reduces investment, further slowing public consumption, adding drag to the economy.

Fifth crosscurrent: Federal Reserve. Strangely, even as unemployment rises – putting aside the “delta” variant – the Fed will be concerned about inflation. The Fed is in a tough spot. On one hand, to stop runaway inflation, it must raise interest rates. On the other, doing so may further slow the economy.

Why? Think on it again – if you must pay more to borrow, you borrow less, slowing your economic activity. For businesses, that means slowing production and hiring, slowing the wider economy. While it might mitigate inflation in future years, the impact will be felt now.

They have another problem. Even as the Fed wrestles with rising inflation, it has a bloated balance sheet. The Fed “purchased” assets in recent years to preserve predictability in our economy and markets. Historically, they never did this, as lower interest rates caused people to borrow, invest, and grow.

Only that did not work recently. Interest went to zero, but things dragged. So, they started buying assets. In time, our economy came back. Under Trump, with lower taxes and regulation, things roared.

Problem is, “we are not in Kansas anymore, Toto.” We are facing slow growth with a fat pile of assets that need to be sold. Like taking your last finger off a card house, this must be gentle. That was how “tapering” of bank holdings was expected to be done – until recently.

Now, spendthrift Democrats have messed up the process. The economy is again delicate, with huge uncertainty. The distorted labor market, stagnant employment, overspending, rising inflation and taxes, lower consumption, and a need to raise rates to confront inflation – has created jitters. In the end, these crosscurrents – relating to each other – suggest a slowing economy. Thank you, Mr. Biden and congressional Democrats.

Healthy economies do not like these sorts of currents. The predictable effect is coming “stagflation.” Nothing suggests we can avoid it. So, prepare.

We hope you've enjoyed this article. While you're here, we have a small favor to ask...

The AMAC Action Logo

Support AMAC Action. Our 501 (C)(4) advances initiatives on Capitol Hill, in the state legislatures, and at the local level to protect American values, free speech, the exercise of religion, equality of opportunity, sanctity of life, and the rule of law.

Donate Now
Share this article:
Subscribe
Notify of
guest
83 Comments
Most Voted
Newest Oldest
Inline Feedbacks
View all comments
Hal
Hal
2 years ago

When is the general citizenry of this Nation going to learn that governance doesn’t give away freebees. Nothing from the government is free. Even social security draws from other funding … especially including INFLATION which is merely a tax on the citizenry that the government sits with pie on its face as if it had nothing to do with it. Federal funding and taxation is mostly just a legal form of hedging in which the politicos try to aim it where it will get them voter approval.

Bob Olden
Bob Olden
2 years ago

I guess you can’t get re-elected by saying “We can’t afford that!” And apparently that goes for both parties, but especially the D’s. But what does that say about we the people who elect them? We don’t give them a mandate to tighten the belt until we get back to fiscal responsibility. I guess that’s the flaw of democratic government: “Once the people learn they can vote for free stuff, it’s all over.”

Only God can save this country, and He does it one heart at a time. And part of the salvation we need is to turn away from our greed, selfishness, pride, and moral corruption and ask God for forgiveness. He offers that through Jesus, the only one who can unscramble our messed up lives and our culture.

Karen
Karen
2 years ago

Great Job Joey crap head. Thanks a whole bunch for your asinine policies. Guess what? You will suffer with us in the long run. Waiting to tell you “I told you so”.

Enuf Said
Enuf Said
2 years ago

Duh–ya tink sew!!

Robert
Robert
2 years ago

Just like when Obummer dumped huge amounts of money into the economy with numerous billions flushed into “pie in the sky” biofuel boondoggle projects that have busted. The Dems throw money around like their political careers depend on it; trying to buy every potential voter with some nominal and drab incentive or trinket. Its their modus operandi. It’s similar to the southern border and the Afghan influx of illegals…..anything stay in control and keep a grip on earthly power, no matter how detrimental to their own country.

Jim Anderson
Jim Anderson
2 years ago

A small correction in the article. It states, “the US has a $28.7 billion-dollar national debt”. It’s a $28.7 TRILLION-dollar national debt. Otherwise, it’s a great article.

Denise Ledford
Denise Ledford
2 years ago

For all those in Texas, Texit is the answer. Check out tnm.me for how to Texit! Other states will follow in our wake. They all know that the federal government does not care about America or Americans.

Eddie Van Halen
Eddie Van Halen
2 years ago

Hey, all you ( D ) communist voters – how do you like the gas prices and being energy DEPENDENT again ? Did I forget to mention grocery prices skyrocketing ? Independent voters need to get their “heads out” and realize that this ( D ) communist party has ALWAYS been about four basic tenets –
TAX – SPEND – LIE – CONTROL.

Rexford Ames
Rexford Ames
2 years ago

The Democrat Led Government is getting a wake up call. All that power has issues and consequences. That’s true of all Major control issues. I’m not an economist but I do home budgeting. That requires balance. Income and output must balance and Savings is a must.
The , I Am therefore, I am Folks have a big problem. We the people do not reside or do we operate in that Big University called: Washington D.C. We are reality. It is we that live day to day doing all the things many of those folks seem to forget. Trouble is, we pay the Taxes they keep spending with an apparent attitude: We Spend and cannot be held accountable for our actions. Now that’s the issue with all those Education Systems. They, Like D.C. have the illusion that they are not accountable nor responsible for their actions. Spending, Communism, Liberalism, etc,etc. Cocoons have that effect! Reality is a very, very different thing.

Garye
Garye
2 years ago

Mr. Charles thank you for the article.
I like how you referenced the cross currents of the useless democrats downward spiral!
These are the same 50+ years of failed socialist/communist policies pushed by democrats to create an ignorant,dependent block of voters.
Once dependant,what is the chance they’ll vote against the handouts???
The “D” in democrats stands for destruction of America!
They ALL must go!

avatcns
avatcns
2 years ago

28.7 trillion dollar debt!

Marv
Marv
2 years ago

We need a lot more Robert B. Charles people who can think and understand.

johnh
johnh
2 years ago

MORAL OF STORY: In my house you cannot spend more than you earn each month or you will run into problems in your life. Listen to that Both Democrats & Republicans that have increased debt by $1Trillion per year for the last 12-years of Trump & Obama. Congress, what is your game plan….

BAE
BAE
2 years ago

Our economy was great with President Trump. Biden and his administration of useful idiots will destroy out economy and country. Safe bet…

Tim Toroian
Tim Toroian
2 years ago

Better buy paddles and chest waders rather than hip boots because it is also going to get deep!

Judy
Judy
2 years ago

Anyone who grasps what the Holy Word of God teaches, understands why this country is going by the wayside. Our country has gradually slithered down the demoralization trail for years. Human nature is our greatest enemy. For blame for our troubles, all we need to do is look in the mirror. We are all to blame in one way or another. And that is the first step God wants to see us take. Accepting responsibility for our bad choices, acknowledging it’s our fault, and then humbling ourselves before Him and asking His forgiveness of OUR sins. We need to get real with God, because He stated in His Word that those who are lukewarm He will spew out of His mouth. There may still be time, but even if there isn’t, just like the Patriarchs in the Bible stated when facing the fiery furnace, ‘Whether our God destroys us or not, we will not serve or bow down to any other God.’ So we can know in our hearts and being right with our Creator that no matter what comes, we DO have Hope of a better and perfect life ahead. Pray for the lost souls of our children and family members.

Margaret
Margaret
2 years ago

Ideas on how to survive the Democrat Socialists? Pay off credit and loans. Economize. Watch less TV from China. Talk to friends. Also Vote Out Democrats and the 17 Republicans that helped vote in this ridiculous “infrastructure” bill. DON’T FALL FOR DONATION SITES! MOST OF THEM ARE SCAMS.

Ralph S
Ralph S
2 years ago

Vote ALL incumbents OUT!!!! Do not vote for any candidate unless they are firmly in favor of passing a term limit amendment for ALL political offices.

CPOBill
CPOBill
2 years ago

Every thing a demorat touches turns to SHIFF! What doesn’t, they steal!

D.P.
D.P.
2 years ago

As they say, “the proof is in the pudding…” This is the history and practice of the democratic agenda. Has been this way again and again. Look at the ebb and flow of the economy over the last 75 years and you will see the same pattern….but, it seems no one either learns or pays attention. Capitalism works when left to operate as it can…without meddlers and manipulators. The sad part is that somewhere along the way, the outcome will be unrecoverable…..and the nation will face financial collapse. Not a pretty picture, no matter how the dems spin it.

Bill Meyers
Bill Meyers
2 years ago

That Debt figure should be $28.7 TRILLION not Billion!!!

Phyl
Phyl
2 years ago

Of course the economy is tanking. The Country is being run by idiots who don’t know how to do anything but tax and spend.

Stephen Russell
Stephen Russell
2 years ago

Tanking due to “taxes” planned, Spending outgrowing needs.
Depression 2 ahead

Garye
Garye
2 years ago

Thank you for the wonderful article. Right on target!

par
par
2 years ago

TOP FIVE MOST HARMFUL BIDEN ECONOMIC POLICIES
Biden’s New Double Death Tax
Raising the Corporate Tax Rate
Increasing Regulations and Red Tape
Increasing Small Business Audits
Increasing Capital Gains Taxes

Sandy Gerdes
Sandy Gerdes
2 years ago

I wish the obvious corruption in the election would be recognized, accepted and the election voided, Trump reinstated as President, as his was elected, and let him clean up this mess. Trump would NEVER, EVER let this happen to our proud USA, he’s the one to come in and clean up Biden’s unfortunate decisions. Let’s get on with the business of America and put Mr. Biden back home where he really belongs.

johnh
johnh
2 years ago

Seems like paying people to do nothing does not fit in economic principles. Trump admin came up with the extra unemployment dollars & warnings were out at that time —- but this needs to stop so that people will go back to work at a job .

Aubrey DeLange
Aubrey DeLange
2 years ago

I was so praying Trumps’ 2016 election would send politicians (Lindsay Graham, Romney & McConnell RINO’s) packing nationwide and elect non-political folks like Herschel Walker types. It didn’t happen then, let’s hope people start waking up and begin electing them in mid-terms this time!

Aubrey DeLange
Aubrey DeLange
2 years ago

Every action is aimed at learning how to absolutely control everyone!

Mike Sordelet
Mike Sordelet
2 years ago

Our country has been on life support since the early 70s when Nixon took our monetary system off the gold standard and replaced it with a credit system based on our government’s promise to pay our debts. This allowed our government to spend more than the country had in gold reserves. This caused wild inflation as the value of the dollar fell through the floor. With the outlandish spending over the last 9 months and the proposed spending in the future our dollar will drop again causing runaway inflation and a economic crisis much like we recently saw in Argentina. It doesn’t really matter who is in the Whitehouse as long as Congress continues to spend without responsibility. We have been saying that we will leave our grandchildren with these debts, but now I believe we will face the consequences of our spending in the very near future!

LiamL
LiamL
2 years ago

These are the most stupid people on the planet. We have got to clean up our elections and send these people packing. I wouldn’t even hire them to clean my toilet.

Larry Taylor
Larry Taylor
2 years ago

I think you mean 28.7 TRILLION, not 28.7 billion.

Barb
Barb
2 years ago

The economy is tanking because the elitists are getting greedier and greedier!!! Greed has a chokehold on America and if it continues, we will become just one more third world country!!!

Rik
Rik
2 years ago

Geez, what a surprise! … “Elections have consequences!” … But now that the Progressively Communist wannabe Democrats HAVE LEARNED TO CHEAT, woe is us! … We the People MUST prepare to fight or America is lost! … I WILL FIGHT!

Stevo
Stevo
2 years ago

Of course it is intentionally going to tank . -All part of the NWO globalist agenda goals is to destroy America – in ALL WAYS POSSIBLE . Biden proves that every day , with his communist buddy obama , & 7/8 of socialist enemies of America – Congress , coaching him on how to do the most damage

Julie P
Julie P
2 years ago

Talk about a future my poor children have to look forward to let alone myself getting ready to retire. I don’t understand how these politicians can screw something up so bad and think they are running the country just perfectly. It’s obvious our country is not what they are interested in. It’s there own evil agendas. What now people?

Keith
Keith
2 years ago

AMAC, please fix this so it can be shared. Sharing as it is now only shows to download the AMAC app and not read the story. Maybe, if people could read the story first, maybe they WOULD download the app!

PaulE
PaulE
2 years ago

(Sarcasm mode on)

Gee, who would have guessed that Democrat control of both the Congress and the Presidency would lead to an economic downturn? A wave of massive over-spending on worthless and counter-productive social engineering programs to be followed up shortly by the largest expansion of taxes and regulations in the history of the country. What could possibly go wrong?

(Sarcasm mode off)

Honestly people. The Democrats spelled out their agenda for this country in 2020 via their 110 page Democrat policy document outlining step-by-step what they would do once they had total control of Washington again. If you’re upset now, just wait until the $6 trillion dollar budget reconciliation package gets enacted later this year. 2022 and beyond are going to be far worse. Elections, whether fraudulent or not, have lasting consequences.

An older blonde women laughing in the kitchen with a grey haired man.
AMAC’s Medicare Advisory Service
The knowledge, guidance, and choices of coverage you’re looking for. The exceptional service you deserve.
The AMAC App on 3 different iPhone
Download the AMAC App
The AMAC App is the place to go for insightful news wherever you are and whenever you want.
disney sign; woke corporations
Dr. Gorka and Biden
electric vehicles; EV emissions
boris johnson and rishi sunak; british election

Stay informed! Subscribe to our Daily Newsletter.

"*" indicates required fields

83
0
Would love your thoughts, please comment.x
()
x

Subscribe to AMAC Daily News and Games