I bet you probably don’t need more evidence to prove that our current economy is floating somewhere near the bottom of the toilet bowl, or to convince you that Bidenomics is a crock of bull dookie that is not working at all, despite the lies being shoved down our throats by the Biden administration. But guess what? You’re getting it anyway.
Experts speaking with the Daily Caller have stated that the U.S. economy is now showing signs of stagflation as its growth is hitting on a downward spiral and prices keep going up for average American consumers. And this is an issue that impacts everyone, though the severity of that impact is different depending on where you are at financially. Just going to the grocery store has become as bad as getting a tooth pulled at the dentist. That’s how high prices are right now.
U.S. annual economic growth measured just 1.6% in the first quarter of 2024, following a report of persistently high inflation in March of 3.5% year-over-year. The combination of both low growth and high inflation, in conjunction with continuously high amounts of government spending and debt, has led to signs of stagflation in the U.S. economy, which wreaked havoc on U.S. consumers throughout the 1970’s, according to experts who spoke to the DCNF.
“It’s not so much that we risk stagflation as we’re already there,” E.J. Antoni, a research fellow at the Heritage Foundation’s Grover M. Hermann Center for the Federal Budget, told the DCNF. “We have basically pulled forward trillions of dollars of economic growth by borrowing from the future, but that must be repaid at some point. And it is highly inefficient as well.”
Stagflation is a unique economic phenomenon that involves slow growth, high unemployment, and elevated inflation and is particularly difficult to address as solutions for one issue can exacerbate the others, according to Investopedia. The most notable example of stagflation occurred in the 1970’s, after an oil crisis.
Oh and guess what else is climbing? The national debt. It went above $34 trillion for the first time at the beginning of 2024 and at the moment, it’s $34.6 trillion, according to information released by the Treasury Department. Any guesses as to how much the debt has increased since Joe Biden took over the Oval Office? Try $6.8 trillion. In four years.
“Stagflation is the inevitable result of Bidenomics,” Michael Faulkender, chief economist at the America First Policy Institute, said during an interview with the DCNF. “When you massively increase spending, whether green subsidies or student loan forgiveness, while simultaneously reducing the ability of the economy to produce because of all the regulatory restrictions being imposed, you get reductions in growth with higher prices. If Bidenomics continues, then we should expect stagflation to continue.”
Biden and high-spending go together like peanut butter and jelly, which has been made abundantly clear by his agenda, which contains items such as the $1.9 trillion American Rescue Plan that was signed in March 2021 and the $1.2 trillion Bipartisan Infrastructure Law, that came a few months later in November. He also signed into law the Inflation Reduction Act in August of 2022, which does nothing to actually reduce inflation, and authorized over $750 billion in spending with $370 billion of the cash set aside for initiatives to fight against climate change.
The Biden administration’s latest plan to forgive student loans would cost an estimated $559 billion over the next ten years through various loan cancellations and interest suspensions. The president had one of his previous, more costly plans to forgive student loans struck down by the Supreme Court in June 2023.
Jai Kedia, a research fellow in the Center for Monetary and Financial Alternatives at the Cato Institute, cautioned the DCNF about assuming the U.S. was suffering from stagflation, noting that the phenomenon is usually accompanied by major supply shocks.
QT continues but there's a long way to go before we return to normalcy, and that likely won't happen w/ Powell & Co. chomping at the bit to cut rates and taper the balance sheet runoff – securities are only down 18.6% from their peak and total assets down just 17.4%: pic.twitter.com/PV48bGZozW
— E.J. Antoni, Ph.D. (@RealEJAntoni) April 25, 2024
“The news on both fronts — inflation and output — is far from ideal, but there is no reason to think that we will get stagflation from just this one report,” Kedia told the DCNF. “When stagflation last occurred in the 1970s and early 1980s, the U.S. economy had significantly different characteristics. That era was marked by severe wage inflation and strong wage contracting at unsustainably high levels, driven primarily by labor union bargaining. Businesses passed those labor costs on to consumers, and since those wage increases weren’t the result of any productivity gains, the result was inflation with little economic growth. That unique situation is (hopefully) unlikely to occur again.”
In a statement released after the GDP report last week, the White House went on to say , “Today’s report shows the American economy remains strong with continued steady and stable growth,” going on to add, “The economy has grown more since I took office than at this point in any presidential term in the last 25 years — including 3% growth over the last year — while unemployment has stayed below 4% for more than two years. But we have more work to do. Costs are too high for working families, and I am fighting to lower them.”
The Federal Reserve has attempted to reduce the rate of inflation by raising the federal funds rate to a range of 5.25 percent and 5.50 percent, which is the highest in 23 years.
“There is absolutely no reason for the Fed to cut rates this year besides the obvious political motivation,” Antoni told the DCNF. “Recall that during the first three years of the Trump presidency, the Fed was raising rates and selling off the balance sheet, also called ‘quantitative tightening.’ The reasoning for tighter monetary policy was fast labor market growth and inflation fears. Today, those indicators look even worse according to the Fed’s own thinking: job growth has been much faster according to official government metrics, and inflation remains far in excess of the 2.0% target, with inflation expectations completely unanchored. They should be talking about raising rates, not cutting them.”
“Sadly, the indicators point to stagflation for quite some time because the excessive government spending that caused this problem isn’t letting up,” Antoni said during his conversation with the DCNF.