Article by Kristin Tate in The Hill
Joe Biden has had a rough few months. Polling has his approval falling below 40 percent and Friday’s jobs report won’t do anything to prop it up. The Afghanistan catastrophe, COVID-19 deaths surpassing those during Donald Trump’s tenure, and the increasing crisis at the southern border all will be secondary compared to the coming recession. Unlike many other economic events, this one will be the direct cause of policies promulgated by the White House.
Three main issues likely will plunge the country into economic backsliding and spark stagflation by the end of 2022: inflation, supply chain issues, and an unraveling labor market.
Americans have noticed increasing prices everywhere from the gas pump to grocery store aisles. Inflation has hit a 30-year high. Economists and political pundits are shifting their tone, away from denying its existence (recall the White House’s “save 16 cents on your July 4th BBQ” approach) to preparing the public for the current and coming pain. Media narratives now reflect that price hikes aren’t “going away very soon” to full risk of “runaway” inflation. Inflated prices already have hit double digits overseas and cost the average household more than $2,000 annually.
Reckless federal spending and money printing are only accelerating inflation. The last year and a half’s policies are effectively “baked in” to what is coming next. However, passing Biden’s $3.5 trillion infrastructure package would have a sapping effect on the economy. The massive spending binge will face a reckoning in December’s fight over raising the debt limit. Senate Minority Leader Mitch McConnell (R-Ky.) already has signaled that he won’t pull the Democrats’ chestnuts out of the fire in two months. The fear of a default or unconventional workarounds, such as a trillion-dollar coin, will stifle investment and lead to increasing bank interest rates to mitigate risk. Politicians could plunge the country into a deep recession wholly of their own making — and the consequences will be felt primarily by American families and small businesses.
At the same time, the “Build Back Better” agenda includes a raft of welfare provisions that will either make more Americans more dependent on the government or drive up prices (or likely both). The proposed Biden tax hikes intend to target the wealthy, but the average family will foot the true cost of the bill through higher rent and mortgage prices, higher health insurance premiums, and higher college tuition. How much more is your family able to spare for D.C.’s recklessness?
As the new recession dawns, many Americans are not prepared to weather bad economic stagnation. As of late …….
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