There may be some cooling due to inflation, but Recent reports It suggests that many Americans are not economically optimistic.Despite President Biden keep celebrating His success wasVideonomicsapproach, the reality is that purchasing power is still declining and the job market remains weak. So why is the current administration so arrogant? This seems to be due to deficit spending.
a poll Researchers at Monmouth University found that only one in four Americans believe the country is heading in the right direction, and a sizable 62% disapprove of Biden’s handling of inflation. And it’s no wonder, given that real wages have been unable to keep up with inflation for an astonishingly long period of time. 26 consecutive months. Naturally, people are starting to get tired.
up to date CPI report indicates that headline inflation will moderate to 3% in June 2023 from 4% the previous month. However, core inflation, excluding food and energy prices, remained high at 4.8% y/y. While this improvement represents some relief, getting the economy back on track will have to address underlying inflationary pressures driven by more than $6 trillion in deficit spending funded by the Federal Reserve’s bloated balance sheet, which is falling too slowly.
Looking to the latest job report June’s numbers were well below expectations and disappointing. Taking into account the downward revision in the previous two months, net employment increased by only 99,000 of his. Moreover, many of these jobs were government jobs, taxing the productive private sector that paid for them.according to household survey, employment has been largely stagnant since March, indicating a lack of real job creation. To make matters worse, the labor force participation rate has yet to return to pre-pandemic levels, indicating that millions of Americans are worried about their job prospects.
Purchasing power is declining even for those who are employed, Lessor Individuals from low socioeconomic backgrounds having a hard time.
If this is the result of “bidenomics,” it is clear that a different approach is needed to revive the US economy. The government needs to curb spending and the Federal Reserve should be more aggressive in reducing its balance sheet.
Despite scant evidence that his efforts are working, President Biden continues to authorize increased deficit spending through initiatives like the Inflation Control Act, the cost of which is estimated to be higher than expected. $1 trillion. The national debt is over $32 trillion, equivalent to about $95,000 per American and about $250,000 per taxpayer, far exceeding the country’s economic output. This continued increase in spending, combined with the challenges facing future generations, as seen in the latest report, debt ceiling agreementcannot effectively bring down inflation or provide the economic relief Americans desperately need.
Another direction is essential, including responsible budgeting to curb overspending and align spending and means. Congress should consider passing strict spending limits at a growth rate more consistent with the average taxpayer’s ability to fund government spending, calculated on the maximum rate of population growth plus inflation. If Congress had adhered to this maximum spending growth rate from 2003 to 2022, instead of actually increasing him by $19 trillion, in cumulative terms he could have increased his debt by $500 billion and static savings for taxpayers to his $18 trillion. In essence, restraining spending now is pro-growth and will promote greater economic prosperity.
The latest inflation and employment data suggest that the touted “bidenomics” approach still leaves a lot to be desired. Securing a brighter economic future requires a serious reassessment of current economic strategies focused on fiscal responsibility and sustainable growth.
Dr. Vance Zinn.is the founder and president of Ginn Economic Consulting LLC and a chief economist or senior researcher at several think tanks across the United States. He previously served as Deputy Director for Economic Policy in the White House Office of Management and Budget from 2019-2020. follow him on twitter @VanceGinn.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.
