Fears of a US recession have sent global markets plummeting just days after President Joe Biden declared the economy was “recovered,” with experts pointing to the lame-duck president's own administration as a driving force behind the turmoil.
Global stocks plummeted on Monday amid growing concerns that the U.S. may be heading toward a recession following disappointing employment data released on Friday. Biden said on July 30 that he wanted to cite “fixing the economy” as his “legacy to Gen Z,” but economists told DCNF that the market turmoil is a byproduct of over-regulation and unchecked spending. (Related: “Not normal”: 1 million+ jobs reported for 2023 didn't actually exist)
Asia-Pacific stock indexes fell sharply on Monday, with Japan's Nikkei closing with its biggest one-day drop of 12.40% since Black Monday in 1987. South Korea's KOSPI fell 8.77%, with trading being halted to stem selling after such a steep drop.
The major US stock indexes also ended Monday with significant (but relatively modest) declines, with the Dow Jones Industrial Average down 2.60%, while the S&P 500 and Nasdaq fell 3.00% and 3.43%, respectively.
Just six days ago, Biden said he had “fixed the economy”…is this what it means to “fix” it? pic.twitter.com/M5xSUU6kCn
— Daily Caller (@DailyCaller) August 5, 2024
EJ Antoni, a research fellow at the Heritage Foundation's Grover M. Herman Federal Budget Center, told DCNF that the administration's Biden economics policies have “turned the return of economic growth and price stability into anemic and inflationary.”
“This series of events would not have happened without the far-left spending spree of the past four years,” he said. “Markets are beginning to realize that the meteoric rise in stocks and other asset classes was driven primarily by a combination of unsustainable government debt and pure hope. We are now undergoing a painful adjustment to reprice assets on a more realistic basis, but there is still a long way to go before prices reflect reality.”
Committee for a Responsible Federal Budget Estimation In 2022, it projected that Biden administration policies would increase the federal deficit by $4.8 trillion between 2021 and 2031.
The latest jobs report showed the unemployment rate rose to 4.3% and the U.S. added just 114,000 employees in July, well below the 175,000 economists had expected. Inflation rose 3.0% year-over-year in June, well above the Fed's 2% target, and prices have risen more than 20% since President Joe Biden took office in January 2021.
The Federal Reserve decided on Wednesday to keep its target range for the federal funds rate unchanged at 5.25% to 5.5%, marking the eighth consecutive meeting where it has opted not to adjust interest rates. Higher interest rates raise borrowing costs, limiting consumers' ability to spend and businesses' ability to hire.
“The Biden-Harris record includes raising taxes, dramatically increasing government spending, including entitlements, and imposing burdensome regulations on businesses and ordinary Americans. [and] “They are raising the costs of labor through regulation,” Diana Furchtgott-Roth, director of the Heritage Foundation's Center for Energy, Climate, and the Environment, told DCNF. “Each effort alone is harmful to the American economy. Combined, these efforts are contributing to inflation and slowing economic growth.”
Federal regulations will add a record $2.1 trillion in costs to the average American in 2023, resulting in a “hidden tax” of $15,788 per U.S. household, the July report said. study From the Competitive Enterprise Institute: The Biden administration has implemented 97 rules costing more than $100 million, causing a surge in regulatory costs.
“Biden's claim last Tuesday that he 'fixed the economy' is yet another string of lies constantly coming out of the mouths of Biden and his staff. [that] “It has eroded confidence and dampened hope among some observers,” Peter C. Earl, a senior economist at the American Institute for Economic Research, told DCNF.
“Claims that 15 million jobs have been 'created,' that inflation was 'over 9%' when he took office, and even more bizarre statements ('We've finally conquered Medicare') will only dampen any enthusiasm that might otherwise be felt by investors and aspiring entrepreneurs,” he continued. “The more frequently Karine Jean-Pierre says 'What President Biden really meant to say is…' the less likely some will want to put risk capital under his administration.”
The White House did not immediately respond to a request for comment.
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