What makes this expansion of the deficit so unusual is that it has not been driven by some kind of fiscal emergency. We are not at war. The economy is not in a depression or even a recession. If anything, it is accelerating. There are no public health emergency measures requiring the shutdown of vast parts of the economy.
A survey published in July found that 72% of Americans say they’re experiencing financial insecurity, and many are living paycheck to paycheck. Americans are increasingly going into more debt, and the country’s national debt is currently over $32.8 trillion, translating to an excess of $253,000 of debt per U.S. taxpayer.
The average 30-year rate shot up to 7.09%, the highest level since April 2002, from 6.96% in the prior week, mortgage finance agency Freddie Mac said on Thursday. It is nearly 2 percentage points above where it was the same period last year.
Presidents who oversee strong economies, often benefitting from the luck of history or existing policies, will see fewer jobs “created” during their terms because space for growth is limited. Biden was given more economic headroom than any president in history — and blew it. That’s the real legacy of “Bidenomics.”
“The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management,” Fitch stated.
“In addition, the government lacks a medium-term fiscal framework, unlike most peers, and has a complex budgeting process.”
While some economists are optimistic as hiring booms, employees are actually working fewer hours. Usually, reducing working hours has been a reliable sign of incoming layoffs – and a possible recession. WSJ explains what it may mean moving forward.
…. it tells an ugly story about the impact of the worst inflation in 40 years and the standard of living. This is the inflation that Mr. Biden did so much to ignite with all of his spending.
A fight between Republicans and Democrats over the debt limit ceiling could send the U.S. economy into a recession even if the standoff doesn’t actually trigger a debt default, analysts say – and a much worse downturn with perhaps 7.5 million people thrown out of work if it does.
Matthew Luzzetti, chief U.S. economist for Deutsche Bank, recently estimated if the next Fed loan officers survey shows a 10-percentage-point rise in the share of banks tightening credit, it could lop about half a percentage point from U.S. output – enough to turn expected meager growth into a recession.
Small businesses impacted by the current economic tumult are filing for bankruptcy at levels last witnessed at the outset of the lockdown-induced recession, even as President Joe Biden touts an uptick in new business ventures.
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