Tag: economy

Congress Should Miss Their Paychecks Too

This week marks the third week of the government shutdown – and there continues to be no end in sight. This week, millions of federal workers officially missed their first paycheck. These workers are staring down the barrel of piling bills; many are unable to put gas in the car or food on the table for their families.

The consequences of a prolonged shutdown are stacking up fast. Federal services are grinding to a halt. Veterans’ career counseling and regional offices have gone dark. Flight delays and travel disruptions are wreaking havoc across the country. And for every week this drags on, the U.S. economy takes a $15 billion hit. A month-long shutdown means 43,000 more Americans are thrown out of work.

And yet, there’s one group that hasn’t missed a single paycheck: members of Congress. While working-class families are about to miss paychecks their livelihoods depend on, fat-cat politicians in Washington continue to get paid. It’s time for Congress to feel the pain they’re inflicting on millions of Americans.

Congress should miss their paychecks.

Arizona Democratic Sen. Ruben Gallego displayed the hypocrisy out loud as the shutdown began. In an interview with NBC News, he defended his refusal to forgo his salary during the shutdown, saying, “I’m not wealthy, and I have three kids. I would basically be missing, you know, mortgage payments, rent payments, child support.”

Exactly, Senator. That’s precisely what millions of everyday Americans are facing right now.

Ask yourself – would this shutdown even happen in the first place if members of Congress couldn’t make their own mortgage payments or pay their own rent? If they were scrambling to fill up their gas tanks or stay on their feet? Not a chance.

My heart breaks for the families who are beginning to feel this impact while their members of Congress treat this like a political game. I’ve lived this struggle myself. In 2005, my husband Scotty was blinded by an IED suicide bomb while serving our country in Iraq. While he lay in a coma at Walter Reed, I was forced to navigate a system that offered no real support – not for him, and certainly not for me. I had resigned from my job to be by his side, while facing student loan debt and mounting care expenses. There were no safety nets, no clear guidance – just bureaucracy and silence.

That was 20 years ago. Shamefully, not much has changed. While I’m thrilled and thankful to see President Trump ensure that members of our military get paid, law enforcement, air traffic controllers, and millions of moms and dads are still missing paychecks.

Keep reading

How the Federal Government Created the Subprime Mortgage Crisis

If anything symbolizes the American dream, it is homeownership—an asset that is viewed as part of a route from poverty and exclusion to independence and responsibility. However, as detailed in Part I, for over a century, state and federal governments worked to racially segregate American neighborhoods, promoting homeownership for whites while denying it for African-Americans. The result is that decades after discriminatory treatment in housing was outlawed, the homeownership gap between minorities and whites remains large.

Such a shameful condition motivated many well-meaning activists to pressure government housing authorities to expand homeownership opportunities to minority and low-income residents. The left saw this as a way to reduce discrimination and marginalization, solving the problems of past racism. The right saw it as a way to build an “ownership society” and give low-income earners a stake in the American dream, an anti-communist tactic first envisioned by Woodrow Wilson.

From the 1990s to the 2000s, both political parties bent the federal mortgage agencies to their will, continually relaxing underwriting standards to promote homeownership. Along with historically low interest rates, this led to an explosion in subprime lending, which fueled the housing bubble and spread toxic mortgages throughout the financial system. Rather than a failure of the free market, the federal government was directly complicit in the mortgage market’s spectacular ramp-up and eventual collapse.

Keep reading

One Third Of Americans Have More Credit Card Debt Than Savings

One in three Americans now have more credit card debt than emergency savings, according to the latest survey by financial services company Bankrate.

As Statista’s Anna Flecks shows in the chart below, this is up ten percentage points from 2011, when the company first started polling the question.

Meanwhile, around 53 percent of respondents said that their savings were currently exceeding their credit card debt.

This is down two percentage points from the same time last year, but slightly up from 2011.

Around one in ten Americans are living paycheck-to-paycheck in 2025, not making any debt or saving up money.

You will find more infographics at Statista

Millennials were the most likely to say that they had tapped into their emergency savings over the past 12 months.

Keep reading

More Americans Experienced Homelessness During Biden’s Term

The number of adults experiencing homelessness is on the rise in the United States.

As Statista’s Anna Fleck shows in the chart below, using data from the U.S. Department of Housing and Urban Development, 771,480 people were living in a state of homelessness in 2024, marking an 18 percent increase from the year before.

You will find more infographics at Statista

Two thirds of these were individuals, while one third were people in families.

Last year saw a particularly worrying rise in the number of families entering homelessness, up 39 percent from 2023, as individuals saw a 9.6 percent rise.

While it remains more common for men to experience homelessness than women in the U.S., at 459,568 men (60 percent) to 302,660 women (40 percent), the gap is narrowing.

Keep reading

Auto Loan Delinquencies Surge 50% As Cracks Deepen Across U.S. Credit Markets

A month after bankruptcies of subprime auto lender Tricolor and auto-parts supplier First Brands, new cracks emerged in U.S. credit markets. This week, Zions and Western Alliance disclosed they were victims of loan fraud tied to funds investing in distressed commercial real estate. The revelations come amid broader credit trouble, and shifting our focus back to autos, there’s new data this morning about credit products tied to the riskiest consumers that have seen a 50% surge in delinquencies. 

Bloomberg cites data from the credit-scoring company, VantageScore, which reveals that delinquencies among the low-tier consumers have surged 50% since 2010. Fueling the delinquencies is a perfect storm of record-high car prices, elevated interest rates, longer loan terms, and monthly payments that average nearly as much as rent for some folks. 

Since 2019, new vehicle prices have jumped over 25% to $50,000, while average monthly payments reached $767, with 20% of borrowers paying over $1,000 per month. Loan rates now exceed 9%, worsening the affordability crisis.

Notably, prime and near-prime borrowers are now defaulting faster than subprime consumers, as lenders tightened standards for the lowest-credit segment, according to the report. The average auto loan balance has risen 57% since 2010, and many borrowers are “upside-down”, owing more than their cars are worth.

“We’re seeing the cost of cars and the cost related to car ownership increase enormously,” VantageScore chief economist Rikard Bandebo said in an interview. “In the past five years, it has increased even faster.”

Bandebo continued, “That’s a double… You’ve been hit by the increased cost of the car and then the financing cost of the car.”

“Consumers now are in a more precarious position than they’ve been since the last recession,” Bandebo said. “We’ve seen this growing trend over the last several years of more and more consumers struggling to make ends meet, and it’s looking like that trend is going to continue into next year.”

Keep reading

Big Government, No Growth – The Implosion Of Statism

Rising government spending and public debt create economic stagnation and declining living standards. Many citizens believe that the state will give them prosperity and equality. However, the state only makes paper promises by issuing debt, creating a constantly depreciated currency. Taxpayers are constantly expropriated, while the recipients of subsidies become a dependent subclass. Who wins? Bureaucrats.

Deficit spending is not a tool for growth. It erodes prosperity, creates persistent secular stagnation, real wage growth decline, and poor productivity growth.

High public spending and government debt falsely inflate GDP through government outlays while, in most cases, masking a private-sector recession underneath. GDP is easily manipulated by increasing government spending and changing the calculation of GDP deflators.

The state issues debt, a form of currency, and establishes a system that continuously suffocates the productive sector. In effect, GDP and CPI serve as measures of economic strength that obscure the imbalances created by the state; GDP overstates real growth by incorporating government spending financed by debt, while CPI, like the GDP deflator, underestimates the currency’s loss of purchasing power.

Major economies face a hidden real recession for households and small businesses using “robust” headline figures bloated by ever-rising government debt. Every new dollar of debt now generates less than sixty cents of nominal GDP in the U.S. However, when we look at countries like Japan, France, the UK or Germany, the multiplier effect of new government debt is either nonexistent or negative. The consequences are evident: true productive economic expansion is hurt by rising taxes, regulatory burdens, and inflation, which reduce incentives for private investment and innovation.

Statism creates enormous disincentives for productive investment and promotes malinvestment and the constant transfer of wealth from the productive sectors to the government. Governments finance their ever-expanding budgets in privileged conditions, creating a crowding out of the private sector that suffers the consequences of persistent inflation and raising taxes.

Keep reading

Unprecedented Times: “It’s Hard To Keep Up, Even By Experienced Folks”

That we are living in unprecedented times was borne out by events in the last couple of days again. Indeed, it is probably hard to keep up, even by experienced folks.

The London silver market saw the spot price of silver pushing above $51 per troy ounce on Friday (and higher again this morning) due to a short squeeze and shortage of silver in London vaults. Some say the situation now, in particular the lack of liquidity, is comparable or even worse than in the early 1980s when the famous Hunt brothers tried to corner the market (after which silver crashed).

Meanwhile, crypto markets saw on Friday what data tracker Coinglass dubbed the “largest liquidation in history”, leading to hefty declines in cryptocurrencies, such as Bitcoin. But significant losses were also recorded in global equity markets, with the S&P500 down 2.7% and investors seeking refuge in ‘safe-haven’ bond markets (10Y USTs -11bp, German Bunds -6bp).

That volatility was clearly driven by the strong-worded warnings by President Trump at the address of China (more on that below), although there were other factors at play, including (geo)political instability. Indeed, just name me one country where the political situation is stable, where there is no ‘polarization’ of society and where policy making is ‘boring’… Still thinking?

In France, newly appointed PM Lecornu, who threw in the towel last week after trying to glue together a group of parties able to steer a budget through parliament was re-appointed by President Macron, again with the same task: …to glue together a group of parties able to steer a budget through parliament. On Sunday President Macron announced the new cabinet, headed by Lecornu.

The turn of events, including Lecornu’s conclusion that it should be possible to reach a deal on the 2026 budget, supported French bonds on Friday. But we think there is not much scope for a further rally in the near term. In fact, as we pointed out last week, we think there is not much scope for a further rally in the near term. Political risks remain until the budget negations are concluded. Both key parties on the far left and right have already indicated they will not support this cabinet and so Lecornu will need all the support he can get elsewhere. It is not to be excluded that he will be toppled again in a no-confidence vote this week. But if he stays, negotiations are likely to remain tough. Most parties underscore the need for a budget, but they will undoubtedly demand (further) concessions, which may weaken fiscal consolidation. In the longer run, that leaves the French curve more vulnerable to future fiscal setbacks.

However, the political focus shifted back to Japan last Friday as the long-standing LDP-Komeito coalition collapsed following Sanae Takaichi’s election as LDP leader. She was set to become Japan’s first female Prime Minister after Shigeru Ishiba stepped down, but Komeito withdrew support over disagreements, particularly on stricter party funding rules. While Takaichi’s leadership is now uncertain, she may still retain power if she can secure backing from parts of the fragmented opposition. Otherwise, snap elections are a real possibility.

Keep reading

New York Doubles Down on Delivery Wage Disaster

In 2023, New York City became the first city in America to pass a minimum wage rate for app-based restaurant delivery drivers. Several other progressive cities have followed suit, resulting in a range of issues from rising delivery costs to many drivers dropping out of the workforce entirely. Now, the city that started it all is doubling down—this time on grocery delivery drivers.

In July, the New York City Council passed numerous bills that it claimed were designed to protect grocery delivery drivers. This legislative package introduced new rules, requiring delivery apps to include a 10-percent tipping option either before or at the time of the order (vs. afterwards, where the option exists now), and mandated that app-based platforms pay delivery drivers within seven days of the end of a pay period.

One of the most notable bills would extend New York City’s minimum wage mandate from restaurant delivery drivers to drivers delivering groceries. The rate, first set at $19.96 per hour in 2023, has risen to $21.44 per hour. Though current Mayor Eric Adams eagerly endorsed the original law (saying at the time, “Our delivery workers have consistently delivered for us—now, we are delivering for them”), he surprisingly vetoed the new expansion. “Now is not the time to do anything that will further increase the cost for New Yorkers of obtaining groceries, when prices are already too high,” Adams said in his veto statement.

Despite mayoral resistance, the City Council has decided to plow forward anyway by overriding Adams’ veto.

New York’s experiment with delivery driver wage mandates hasn’t gone well. Pay went up after the 2023 rule kicked in, but so did prices—and many drivers left the market altogether. The city saw an 8 percent drop in its delivery workforce, while food delivery costs rose 10 percent, including a 12 percent jump in restaurant prices and a staggering 58 percent spike in app fees. Tips, meanwhile, plunged 47 percent. Platforms even started capping drivers—at one point, Uber Eats reported more than 27,000 New Yorkers were on their driver waitlist.

Seattle followed suit in 2024 with a $26-an-hour minimum wage for delivery drivers—and immediately watched the system collapse. Apps tacked on a new $5 delivery fee, and with taxes added, customers were soon paying bills with nearly 30 percent of the cost unrelated to the food itself. DoorDash saw 33,000 fewer orders in just the first two weeks, wiping out about $1 million in restaurant sales.

Counter to the law’s intention, many Seattle delivery drivers saw their earnings slashed by over half. “Demand was dead,” according to one such driver. A recent report from gig companies found that, following the ordinance taking effect, delivery orders dropped 25 percent, and driver pay fell 28 percent per hour logged on.

Even Seattle’s City Council president, who initially backed the mandate, later proposed cutting the topline rate to $19.97, in line with the state’s minimum wage. The partial repeal failed to pass.

Keep reading

California’s Fast Food Minimum Wage Hike Cost the State 18,000 Jobs. That Shouldn’t Surprise Anyone.

In 2023, California passed a law requiring a $20 per hour minimum wage for all fast-food restaurants with more than 60 locations nationwide. Democratic Gov. Gavin Newsom portrayed the union-supported law as pro-worker, saying it moved the state “one step closer to fairer wages.”

Other California politicians supporting the law claimed it would provide a path to economic security for lower-income workers, enabling them to more assuredly put food on the table.

“Sacrifice, dedication, and the power of a government who serves its people is what got us to this moment,” said then-Assemblymember Chris Holden (D–Pasadena).

But the carve-out for smaller chains was an implicit acknowledgment that the law would come with costs—costs that smaller businesses with slimmer margins presumably could not afford. New research suggests that the mandate has also resulted in fewer jobs for struggling entry-level workers.

The law went into effect in April 2024 and increased the hourly pay of an estimated half a million workers across the state. But without the law in place, thousands more workers would likely have been employed.

Keep reading

US Farmers Are Facing The Worst Economic Downturn In At Least 50 Years

The agriculture industry in the United States is deeply broken. Farmers are the foundation of it all, but they are being financially squeezed from every direction. They are being squeezed by the giant monopolies that control the seeds, fertilizer and machinery that they need. And they are also being squeezed by the giant monopolies that purchase most of what they produce. Meanwhile, demand from overseas has dried up thanks to the global trade war. U.S. farmers really are facing a “perfect storm”, and as a result most farms are losing money and bankruptcies are surging.

Most Americans have absolutely no idea how bad it has gotten.

According to the president of the Nebraska Farmers Union, this is the worst economic downturn for farmers in at least 50 years…

“We’re in the middle of the worst economic downturn that I’ve seen in my 50 years,” John Hansen, the president of the Nebraska Farmers Union, said at a regional meeting in Beatrice, Nebraska, last week.

“Agriculture is our foundation here in Nebraska and many states in the Midwest,” Don Schuller, a corn and soybean farmer, told ABC News. “If agriculture is failing here everything is going to fail.”

I wish that I could tell you that he is exaggerating.

But I can’t.

A sobering article that was recently published by AGWEB that was just shared with me is warning that our farmers are facing a “generational collapse”…

Farmers are not crying wolf. The wolf is real and right outside the door in the form of generational collapse.

The inescapable crop math of sustained crippling commodity prices and high input costs has many growers screaming for immediate relief, potentially via aid payments in late 2025 or early 2026. However, bailouts are Band-Aids over bullet holes.

The giant monopolies that provide the things that our farmers need increase their profits by squeezing farmers, and the giant monopolies that purchase what our farmers produce increase their profits by squeezing farmers.

For a while, many farms could still at least break even, but now conditions have gotten so bad that many farmers are losing hundreds of dollars per acre…

Yes, says Bailey Buffalo, 40, owner of Buffalo Grain Systems in Jonesboro, and president of Farm Protection Alliance.

“Horror stories. The pain is unreal. Worst farming situation I’ve seen in my life,” Buffalo says. “Look at Extension [University of Arkansas] numbers — corn growers losing $240 per acre; soybeans losing $144 per acre; and rice losing $380 per acre. The cotton growers may be worst of all.”

This is what I mean when I say that the agriculture industry is broken.

So what is going to happen as vast numbers of our farmers simply go bankrupt?

Keep reading