Reporters and analysts are getting used to describing news about the U.S. economy as “mixed.” The public, however, knows it’s all bad, because the results of President Joe Biden’s economic and energy policies are hitting Americans right in their pocketbooks.
The latest ostensibly good news was Thursday’s Bureau of Economic Analysis report that the second quarter decline in U.S. gross domestic product was a little less than previously stated: -0.6% instead of -0.9%. That’s good only if your definition of success is slightly slower failure.
The reality is that the U.S. economy is in serious decline and getting worse.
“U.S. companies reported a sharp drop in business activity in August in a broad-based decline led by services companies, though manufacturing slowed as well,” the Wall Street Journal reported last week.
Business sector output per capita has dropped precipitously since Biden took office. That figure measures what the economy really amounts to for most people, and it is dire.
“Businesses pulled back on orders for long-lasting goods in July, reflecting a cooling in demand amid other signs of a slowing U.S. economy,” the Wall Street Journal reported two days later. “Surveys of purchasing managers by S&P Global indicated manufacturing activity contracted in August for the second straight month, with its manufacturing index falling to a 26-month low.”
Household budgets are taking an even more brutal beating, with inflation at 8.5% in July. Americans are finding it more difficult to buy homes, a central component of the American Dream, because of prior price inflation and the rise in interest rates. “Housing affordability is at its lowest level in 30 years,” CNBC reports. Mortgage interest rates are nearly double what they were a year ago.
The decline in homebuying means if you own a home, there’s a good chance its value is decreasing.
“Home prices declined 0.77% from June to July, the first monthly fall in nearly three years,” says CNBC. That was “the largest single-month decline in prices since January 2011. It is also the second-worst July performance dating back to 1991, behind the 0.9% decline in July 2010, during the Great Recession.”
Meanwhile, Moneywise reports “the median rent in the U.S. topped $2,000 a month in June — and the increases show no sign of stopping.” As a result, “households representing a total of 8.5 million people were behind on their rent at the end of August,” and “3.8 million of those renters say they’re somewhat or very likely to be evicted in the next two months.”
Real disposable personal income has been decreasing since March 2021 when Biden signed the $1.9 trillion stimulus package and his first wave of regulations and energy restrictions hit the economy.
As might be expected, consumer confidence remains at near-record low levels.
All of this bad news has resulted directly from the grotesque spending spree the Biden administration and congressional Democrats have inflicted on current and future taxpayers in hopes of reducing the Democrats’ losses in this November’s elections (which might flip one or both chambers of Congress into Republican hands), plus Biden’s war on fossil fuels, which has rapidly pushed up energy prices and the cost of everything that uses energy, which is pretty much everything.
The trillions of dollars of new federal spending over the past 19 months is doing nothing but diverting money from productive activities into a massive vote-buying scheme.
There is nothing the Federal reserve, or anybody else, can do about such insanity. Continually doubling down on their failing efforts at Keynesian stimulus, Biden and his congressional cronies are putting so much weight on the economy a collapse is all but inevitable.
Truly good news will arrive only when the long-suffering American public votes out those responsible for this fiscal atrocity and replaces them with lawmakers who act as stewards of a sacred public trust, not voracious parasites on the body politic.