Tag: economy

The Associated Press Gaslights Struggling Americans, Claims Lower Prices Would Actually Be a Bad Thing

The Associated Press (AP) is running cover for the rampant inflation experienced under Joe Biden by claiming that falling prices would actually be a bad thing.

In an article by the AP’s economics writer Paul Wiseman, he makes the case that lower prices would be worse for the economy as it is a sign of deflation:

Wouldn’t it be great if prices actually fell — what economists call deflation? Who wouldn’t want to fire up a time machine and return to the days before the economy rocketed out of the pandemic recession and sent prices soaring?

At least prices are now rising more slowly — what’s called disinflation. On Friday, for example, the government said a key price gauge rose 0.3% in February, down from a 0.4% gain in January. And compared with a year earlier, prices were up 2.5%, way down from a peak of 7.1% in mid-2022.

But those incremental improvements are hardly enough to please the public, whose discontent over prices poses a risk to President Joe Biden’s re-election bid.

Wiseman goes on to make the case that prices going back to what they were before Biden took office would have a detrimental impact:

“Most Americans are not just looking for disinflation,’’ Lisa Cook, a member of the Federal Reserve’s Board of Governors, said last year. “They’re looking for deflation. They want these prices to be back where they were before the pandemic.’’

Many economists caution, though, that consumers should be careful what they wish for. Falling prices across the economy would actually be an unhealthy sign.

“There are,’’ the Bank of England warns, “more consequences from falling prices than meets the eye.’’

Deflation is, of course, a well known phenomenon that can have serious negative economic consequences. However, what most Americans probably wish for is that inflation had never been allowed to skyrocket in the first place, instead remaining at a healthy level of between one and two percent.

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Secret RCMP report warns Canadians may revolt once they realize how broke they are

A secret RCMP report is warning the federal government that Canada may descend into civil unrest once citizens realize the hopelessness of their economic situation.

“The coming period of recession will … accelerate the decline in living standards that the younger generations have already witnessed compared to earlier generations,” reads the report, entitled Whole-of-Government Five-Year Trends for Canada.

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“For example, many Canadians under 35 are unlikely ever to be able to buy a place to live,” it adds.

The report, labelled secret, is intended as a piece of “special operational information” to be distributed only within the RCMP and among “decision-makers” in the federal government.

A heavily redacted version was made public as a result of an access to information request filed by Matt Malone, an assistant professor of law at British Columbia’s Thompson Rivers University, and an expert in government secrecy.

Describing itself in an introduction as a “scanning exercise,” the report is intended to highlight trends in both Canada and abroad “that could have a significant effect on the Canadian government and the RCMP.”

Right from the get-go, the report authors warn that whatever Canada’s current situation, it “will probably deteriorate further in the next five years.”

In addition to worsening living standards, the RCMP also warns of a future increasingly defined by unpredictable weather and seasonal catastrophes, such as wildfires and flooding. Most notably, report authors warn of Canada facing “increasing pressure to cede Arctic territory.”

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The White House Claims Borrowing $16 Trillion Over the Next Decade Is Fiscally Responsible

The budget plan President Joe Biden unveiled on Monday would hike taxes, increase federal spending to unprecedented levels, and lock in budget deficits that average nearly $2 trillion annually for the next decade.

But possibly the craziest detail is the fact that the White House is trying to frame all of that as being an exercise in fiscal restraint.

No, really. In a “fact sheet” released alongside the budget, the White House touted how the proposal would cut the deficit by $3 trillion over the next 10 years. “Strong and shared growth that benefits all Americans isn’t just good for working families and the economy; it will also lead to better fiscal outcomes,” the administration claims, adding that Biden believes “long-term investments in our nation and its people should be paid for.”

Someone in the White House might want to Google what the phrase “paid for” actually means, because Biden’s budget assumes the federal government will keep borrowing at near-record levels for the next decade.

For fiscal year 2025, which begins on October 1 of this year, Biden is asking Congress to spend $7.3 trillion while the federal government will collect just $5.5 trillion in taxes. That will necessitate borrowing $1.8 trillion to make ends meet. Over the 10-year window covered by the president’s budget plan, federal revenues would exceed $70 trillion, but Biden is proposing to spend $86.6 trillion.

This is what “paid for” looks like, apparently.

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BIDEN IS BANKROLLING ISRAEL’S WAR AMID GROWING FINANCIAL HARDSHIP AT HOME

IN LATE OCTOBER, President Joe Biden issued two supplemental funding requests. The first, primarily to support Israel’s war on Gaza and Ukraine’s war against Russia, became the $95 billion National Security Act, which the Senate passed in February. This week, Biden urged House leadership to pass the bill as soon as possible.

Never has the president appeared more committed to advancing one of his priorities. Biden delivered a rare Oval Office address specifically to market the plan — something he hasn’t done for any other proposal — and designated the funding as “emergency requirements.” In the weeks and months that followed, he ensured that it remained at the top of Congress’s agenda, even if that meant delays to other legislative business. His hard work paid off: The current bill gives Biden pretty much exactly what he asked for.

The second proposal is half the size of the first and funds domestic programs such as grants to child care providers and disaster relief. This request wasn’t designated as emergency spending.

While Biden personally and repeatedly urged Congress to approve his foreign policy plan, there is not a single instance of him even mentioning his domestic proposal in a statement since offering it on October 25. It hasn’t made an appearance on his personal or presidential X accounts either. Indeed, the way the proposal is written suggests that Biden never intended it to be taken seriously. The foreign policy request is a 69-page, fully drafted legislative proposal that’s formally addressed to the House speaker; the domestic request is a two-page summary table.

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Income Needed To Afford A Home In The US Has Soared By 80% Since 2020

The Biden administration and its fawning PR industry, also known as the mainstream media, have over the past year been desperate to explain to ordinary deplorables Americans why the US economy is ackchyually doing “so much better” than most peasants give the 81-year-old’s handlers credit for (see “The Economy Is Great. Why Do Americans Blame Biden“, “Voters Are More Upbeat on Economy, but Biden Gets Little Benefit, WSJ Poll Shows“, “Is Biden Going Down With the Ship Called Bidenomics?”, “Why Biden Touts Jobs When Americans Care About Prices“, and so on).

And yet, for all the seasonal adjustments, data rigging, propaganda and angry outbursts by the senile president,  there may be a very simple reason why Biden will lose the Nov 2024 election not just on the catastrophic debacles that are immigration and foreign policy (Afghanistan, Ukraine, Israel), but also on the economy, and that has to do with the snuffing of what was once the American dream – namely, owning a house.

According to Zillow, the income needed to comfortably afford a home in the US has leapt 80% since 2020, far exceeding what the BLS reports has been a 23% increase in median household income over the same period.

The real estate website found home buyers today need to make more than $106,000 a year, up $47,000 from 2020, a change driven largely by higher prices and borrowing costs.

“Housing costs have soared over the past four years as drastic hikes in home prices, mortgage rates and rent growth far outpaced wage gains,” said Orphe Divounguy, a senior economist at Zillow.

Some math: in 2020, a household earning $59,000 a year could comfortably afford the monthly mortgage on a typical US home, assuming the rule of thumb that a buyer can spend up to 30% of their income on housing and make a 10% down payment. That was less than the US median income of about $66,000 at the time, meaning more than half of American households had the financial means to afford homeownership.

Fast forward just four years to today, when it takes roughly $106,500 in income to afford a typical home, and median earnings are about $81,000, putting a home purchase out of reach for most families.

In 14 large housing markets, led by a handful of cities in California, Zillow estimated that household income must be $150,000 or more to comfortably afford a typical home. Among the 50 largest metropolitan areas studied, only Pittsburgh still had an income threshold for affordability below the $59,000 national average from 2020.

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The U.S. national debt is rising by $1 trillion about every 100 days

The debt load of the U.S. is growing at a quicker clip in recent months, increasing about $1 trillion nearly every 100 days.

The nation’s debt permanently crossed over to $34 trillion on Jan. 4, after briefly crossing the mark on Dec. 29, according to data from the U.S. Department of the Treasury. It reached $33 trillion on Sept. 15, 2023, and $32 trillion on June 15, 2023, hitting this accelerated pace. Before that, the $1 trillion move higher from $31 trillion took about eight months.

U.S. debt, which is the amount of money the federal government borrows to cover operating expenses, now stands at nearly $34.4 billion, as of Wednesday. Bank of America investment strategist Michael Hartnett believes the 100-day pattern will remain intact with the move from $34 trillion to $35 trillion.

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The Average U.S. Household Is Spending $1,019 More A Month Just To Buy The Same Goods And Services It Did 3 Years Ago

It seems odd to talk about 2021 as “the good old days”, but the truth is that the cost of living was far lower just three short years ago.  Earlier today, I did an interview with Sam Rohrer of Stand In The Gap Today in which we discussed how food prices have gotten wildly out of control.  One example that I brought up was the fact that a Big Mac “value meal” can cost up to 18 dollars in some parts of the country.  There is no way that I would shell out 18 bucks for a burger, some fries and a drink at McDonald’s.  But this is the economic environment that we live in today.

Has your income gone up by more than a thousand dollars a month over the past three years?

If not, you are falling behind.

According to economist Mark Zandi, the average U.S. household is now shelling out an additional $1,019 a month just to purchase the exact same goods and services that it did three years ago…

The typical U.S. household needed to pay $213 more a month in January to purchase the same goods and services it did one year ago because of still-high inflation, according to new calculations from Moody’s Analytics chief economist Mark Zandi.

Americans are paying on average $605 more each month compared with the same time two years ago and $1,019 more compared with three years ago, before the inflation crisis began.

In the old days, I actually enjoyed going to the grocery store.

But now it has become such a painful experience.

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Biden’s New Regulation Could Make Up to 1 Million Jobs Vanish, According to Manufacturing Leader

The Biden administration is in the process of putting in place a rule one manufacturing leader says could kill off a million manufacturing jobs.

Jay Timmons, president and CEO of the National Association of Manufacturers, made his prediction in an advance copy of his annual state of manufacturing address, according to Fox Business.

The remarks said that while Biden claims to support manufacturers, “what he won’t tell you is that his federal agencies are, at this very moment, working to undermine his manufacturing legacy — those agencies are undermining your success.

“In fact, just two weeks ago, they announced one big regulation that could wipe out up to 1 million jobs. It’s referred to as National Ambient Air Quality Standards or PM2.5,” he said.

“It’s not the name that matters. It’s the consequences. It’s stricter than rules they have even in Europe,” he wrote.

“And in vast portions of the country, we will barely be able to build new manufacturing facilities as a result,” Timmons said.

The rule imposes a stricter air quality standard on what’s known as fine particle pollution.

“Michigan would be one of the states hit hardest. And if new manufacturing investments dry up, that spills over to the rest of the state economy,” Timmons said.

“It affects the family trying to sell their home, the teacher hoping for new investments in schools, the students looking for job opportunities here in the state,” Timmons said

Timmons said that forcing manufacturers to move to other nations defeats the goal of clean air rules.

“And to what end? You cannot solve the world’s environmental challenges by driving manufacturing investment away from the United States to countries with lower standards,” he said.

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Good Times, Bad Times: Eviction Edition

Happy Tuesday and welcome to another edition of Rent Free. Despite the ink still wet on many state-level YIMBY reforms prodding local governments to allow housing, we’re already witnessing a concerted counter-revolution from the forces of local control. This week’s stories include:

  • Slow-growth activists in the Boston-adjacent suburb of Milton, Massachusetts, have successfully overturned state-required zoning reforms that allowed apartments near the town’s train stations.
  • Local governments in Florida are trying to defang a new state law allowing residential high-rises in commercial zones with lawsuits and regulatory obstructions.
  • A lawsuit against Arlington, Virginia’s exceedingly modest “missing middle” reforms that were passed last year trundles on.

But first, our lead item is a short take on how America’s overregulated, undersupplied housing market turns good things, like economic growth, into bad things, like more evictions.

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WE GET WHAT WE PAY FOR: THE CYCLE OF MILITARY SPENDING, INDUSTRY POWER, AND ECONOMIC DEPENDENCE

Military spending makes up a dominant share of discretionary spending in the United States; military personnel make up the majority of U.S. government manpower; and military industry is a leading force in the U.S. economy. This report finds that as a result, other elements and capacities of the U.S. government and civilian economy have been weakened, and military industries have gained political power. Decades of high levels of military spending have changed U.S. government and society — strengthening its ability to fight wars, while weakening its capacities to perform other core functions. Investments in infrastructure, healthcare, education, and emergency preparedness, for instance, have all suffered as military spending and industry have crowded them out. Increased resources channeled to the military further increase the political power of military industries, ensuring that the cycle of economic dependence continues — militarized sectors of the economy see perpetual increases in funding and manpower while other human needs go unmet. 

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