Tag: inflation

Gen Z Is Broke and Fed Up With Politics

At Thanksgiving last year, a great-aunt tried to offer Kayla Cornett a reassuring example: Her older cousin had worked hard, saved and bought a house. Cornett, 24, could do the same, she said — if she tried just a little bit harder.

What stayed with her long after the turkey was cleared was the implication that her current efforts just weren’t enough. She was trying to keep up with rent and the ordinary expenses of adulthood, and it was a struggle. She recently started carrying a credit-card balance for the first time, she says, after even modest costs began piling up. Filling her gas tank was $40. “I can not eat, or I can have credit card debt,” she remembers thinking when older relatives questioned her balance.

Cornett and her partner have stayed in their Raleigh apartment even as the complex has grown less safe and cars have been broken into. They had moved in 2023 and were reluctant to do so again; other places now cost $200 or $300 more per month. Leaving would mean trading one worry for another bill they can’t afford.

“The little things are accruing in a way that feels insurmountable to me,” Cornett says.

The affordability crisis is a struggle felt by everyone in the country, but it’s hitting Cornett’s generation particularly hard as they emerge into adulthood with high inflation, little savings, a wobbly job market and a lifetime of dysfunctional politics. Transunion, a consumer credit reporting agency, found in a 2024 study that 22- to 24-year-olds in Gen Z had higher average credit-card balances, higher average auto-loan balances and higher average personal-loan balances than millennials of the same age a decade earlier, even when adjusted for inflation. Gen Z borrowers also had higher delinquency rates than their millennial counterparts.

This gap — between the promise that hard work will bring stability and the costs young adults say they can’t get ahead of — is key to understanding the politics of Gen Z, a voter group that helped President Donald Trump win in 2024, but whose longtime loyalties have yet to be won by either party.

After Trump’s victory, much was made of a vibe shift in American politics. The manosphere was ascendant and tradwives were everywhere. For a brief moment, it seemed like conservatives had captured the attention of American youth. Perhaps. Or perhaps Trump pulled in young voters because of his promises to rein in high prices, and since he failed to do so — amid his tariffs and his war with Iran — young people are preparing to reject the GOP in droves in the midterms.

Gen Z’s political behavior is often viewed through the lens of cultural issues or internet trends. But based on a dozen interviews with Gen Zers from across the country, those explanations obscure a more fundamental force: They belong to a generation coming of age with less financial security and with a growing sense that the American economy doesn’t deliver, at least not for them. A crushing debt load is the most tangible proof.

“The first time I voted was the 2024 presidential election,” says Anna Yi, a 21-year-old Democrat studying at the University of North Carolina-Chapel Hill. “I remember being a little bit naive and being like, ‘There’s going to be a lot of change. There’s going to be a lot of sweeping social reform and whatnot.’ Now it’s: Who’s going to get me a job? Who’s going to let me afford my own place before I turn 40?”

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Inflation Is Rising on Top of Inflation

The September Consumer Price Index has come in at 3.7%, up from 3.4% in August, with prices rising another 0.6% in a single month. The Bureau of Labor Statistics reported the largest monthly increase in five months, driven primarily by energy. Gasoline jumped 9.1% in September alone, accounting for more than half of the monthly increase, while the overall energy index rose 5.2%. The politicians and economists continue talking about inflation as though these monthly reports represent the entire cost-of-living problem. They seem incapable of understanding that Americans are paying these increases ON TOP of the massive inflation that has already accumulated since 2020.

The breakdown of September inflation illustrates just how unevenly these increases are hitting consumers. Energy prices are now 20.4% higher than a year ago, gasoline has surged 34.2%, and fuel oil has exploded 74.2%. Airline fares have risen 22.4%, while education is up 3.8% and shelter another 3.2%. These are not insignificant expenses that households can simply eliminate. People must drive to work, heat their homes, pay their mortgages or rent, and purchase the necessities of life. The government can exclude food and energy to produce its preferred core inflation figure of 2.6%, but nobody gets to exclude those expenses from their household budget.

The cost of living was already elevated before this latest surge. The inflation accumulated during the pandemic never disappeared. Prices did not return to 2020 levels simply because the annual inflation rate temporarily declined. When a household is already paying roughly 30% more for many everyday expenses than it did before the pandemic, another 3.7% increase means the purchasing power of its income deteriorates further. This is why the public becomes increasingly angry when politicians announce that inflation is improving. They are discussing the RATE of increase while the public is struggling with the actual PRICE of everything.

Energy is now feeding another wave of inflation throughout the economy. The disruption caused by the conflict involving Iran has pushed fuel costs higher, and that expense does not remain confined to the gasoline pump. Diesel moves the trucks that deliver food, supplies the agricultural industry, and supports construction and manufacturing. When transportation becomes more expensive, those costs eventually work their way into everything from groceries to building materials. The Fed cannot manufacture oil, reopen shipping routes, or resolve geopolitical conflicts by raising interest rates another 25 basis points.

Meanwhile, the labor market is showing signs of weakness. September payroll growth was only 29,000, and unemployment stood at 4.2%. The economy is producing insufficient employment growth to give workers confidence that they can simply demand higher wages to offset these rising costs. This is the squeeze that conventional economic theory continually fails to address. Consumers face higher prices while employment conditions weaken, and raising interest rates to combat inflation can make financing even more expensive for businesses already struggling with energy and operating costs.

Washington is also the largest borrower in the economy, yet nobody seriously expects Congress to stop spending. The federal government continues accumulating debt, paying more to service that debt, and competing with the private sector for capital. The Federal Reserve can influence short-term rates, but it cannot control government deficits, international capital flows, energy supplies, or the willingness of businesses and consumers to spend. The academics continue pretending that inflation is something they can fine-tune through monetary policy while ignoring the fiscal and geopolitical forces driving the economy.

The September report is particularly troubling because inflation is accelerating at a time when the Fed has already reversed its previous easing policy. The bond market is watching these numbers because investors must consider whether the yield on government debt adequately compensates them for inflation. Washington wants lower borrowing costs, but global capital has no obligation to finance the government at artificially low rates simply because politicians have accumulated debts they cannot afford to service.

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Americans Are Spending More Because Everything Costs More

Economists keep pointing to consumer spending as proof that the American economy remains strong. Americans spent 0.9% more in August, and naturally this is being celebrated as the resilient American consumer. But real disposable income did not increase AT ALL, while the personal savings rate fell to just 4.1%. Americans are spending more while their inflation-adjusted income is going nowhere and savings are being depleted to maintain their standard of living.

The cost-of-living crisis is showing up in the numbers. Consumer spending can rise during inflation simply because everything costs more. If your grocery bill rises from $150 to $200, you increased consumer spending by 33%, but you did not become wealthier or eat 33% more food. You simply handed over more dollars for the same necessities.

Personal consumption expenditures increased by $190.8 billion in August while personal income increased only $66.6 billion. Real consumer spending rose 0.6%, but real disposable income was flat. You can maintain that imbalance temporarily by reducing savings or borrowing, but you cannot maintain it forever.

This is what Washington never understands about inflation. They tell people inflation has fallen because the RATE of increase is lower than it was at the peak. That does not mean prices went back down. Consumer prices are roughly 30% higher than at the end of 2019. Something that cost $100 then costs roughly $130 today. Lower inflation merely means prices are rising more slowly from an already elevated level.

This is why consumer confidence can collapse while spending remains strong. The Conference Board’s Consumer Confidence Index plunged to 81.9 in September, its lowest reading since 2014. The University of Michigan’s sentiment index fell to 48.1 and is now 15% below January. People are continuing to spend because they must continue living, but they are increasingly worried about what comes next.

The University of Michigan reports that consumers’ expectations for inflation over the next year climbed to 4.6% in September, up from 3.4% in February. Consumers’ assessments of both their current and expected personal finances also deteriorated. The paycheck may still be coming in, but it simply does not stretch as far as it once did. Americans feel the conditions of the economy daily.

Even if inflation fell to 2% tomorrow, today’s elevated price level would remain. Prices would simply continue increasing from that higher base. This is how inflation quietly destroys the middle class. Savings decline, debt rises, homeownership becomes harder, young people delay families, and retirees discover that their savings purchase far less than expected.

The American consumer has kept this economy moving, but there is a limit to how long households can spend faster than their real incomes grow. You cannot raid savings forever, increase credit-card balances forever, or finance your standard of living indefinitely.

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The Inflationary Backlog 

Everyone looks at the headline manufacturing number and moves on, but buried inside the September ISM report is something far more important. The Prices Index surged 6.8 points to 77.9 while the Backlog of Orders Index jumped 4.6 points to 56.4. When backlogs move above 50, unfilled orders expand, meaning manufacturers are receiving work faster than they can efficiently complete it. When that happens at the same time prices are surging, the supply chain is telling us there is still pressure in the pipeline.

ISM reported that 43.5% of respondents were paying higher prices while only 2.7% reported lower prices, so this is not merely a story about stronger orders. Costs are rising sharply while unfinished work accumulates.

That combination can become inflationary because shortages change behavior. Companies begin ordering earlier because they fear they will not receive what they need later. Buyers become less concerned about negotiating the lowest price and more concerned about securing supply. Suppliers gain pricing power because customers cannot simply walk away when everybody else is waiting for the same materials. We saw precisely this during COVID when shortages encouraged businesses to order more inventory as protection against future shortages, making the bottlenecks even worse.

This is why the backlog matters more than most people realize. These are orders already sitting in the pipeline waiting to be completed, meaning they represent future production even if new demand begins to weaken. Consumer confidence can decline and the labor market can soften while manufacturers simultaneously face rising costs and unfinished orders. That is how you end up with economic weakness and inflation at the same time.

The Federal Reserve cannot fix this with another 25-basis-point move. Higher interest rates do not produce another barrel of oil, manufacture copper, eliminate tariffs, reopen shipping lanes, produce semiconductors, or build another factory. The Fed can suppress demand, but it cannot manufacture supply, and higher borrowing costs can actually make expanding productive capacity more expensive.

This is precisely why inflation can come in waves. CPI tells us what consumers have already paid, while manufacturing data can reveal pressure moving through the system before those costs reach the final customer. Manufacturers can absorb higher costs for a while by sacrificing margins, but eventually somebody pays. If the Prices Index remains elevated and backlogs continue expanding, businesses will increasingly attempt to pass those costs down the chain.

The September numbers should therefore be watched carefully. One month does not establish a trend, and backlogs could fall again, but a Prices Index of 77.9 alongside a Backlog of Orders Index at 56.4 is not a signal that inflationary pressure has simply disappeared. While Wall Street obsesses over every sentence from the Federal Reserve, the people actually producing goods are telling us something much more useful: their costs are rising while the work waiting to be completed is piling up.

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Trump Says Inflation Will Pay Off The $40 Trillion Debt “Very Rapidly”

President Trump thinks ‘certain levels’ of inflation could take care of the $40 trillion national debt. 

“You know, inflation. Certain levels of inflation will also pay off that debt very rapidly. Very rapidly,” he told TIME in an interview published Thursday, after the outlet pointed out has grown by about $11 trillion over his five years in office. In response, Trump first blamed Joe Biden, then the Fed, then hinted at a plan he wouldn’t share.

“I know I’m the best in the world,” Trump said. “The best – I don’t want to tell you what those means are, but you can pay off the debt through other means. But the one thing that you can do is pay it off through growth, and we’ve never had growth like this.”

Later he circled back, saying “the growth is going to pay off the debt” and that the Fed’s hikes were “hurting our country more than inflation is hurting our country.”

He didn’t say what level of inflation he had in mind, or whether he wants the Fed to tolerate more of it. Earlier in the same interview, though, he blamed Biden for “the biggest inflation in history” and said he “inherited the greatest inflation in history,” adding that “the only thing I have to get down now is the gas.”

Headline CPI rose 3.4% in the 12 months through August, with core at 2.4%, according to the BLS. On Sept. 16 the Fed raised rates for the first time since July 2023 – a unanimous quarter-point hike to 3.75%-4% that included Trump’s own pick for chair, Kevin Warsh – and penciled in another before year-end. Trump told TIME he “probably would have voted against the board” if he were Warsh, and has called for rates of 1% “or less.”

On Thursday, the day TIME published the interview, the 10-year Treasury yield touched 5.34%, its highest since 2002. It closed at 5.24%.

He’s Floated This Before

None of this is new for the self-described “king of debt.” In May 2016 he told CNBC the US could buy back its own bonds at a discount if rates went up. That was widely read as a default threat, so a few days later he went on CNN to walk it back. “You never have to default because you print the money, I hate to tell you, OK?” he said.

A month before that, he told the Washington Post he could wipe out what was then a $19 trillion debt “over a period of eight years” – a debt that has since more than doubled.

Buybacks are back, too. After the debt crossed $40 trillion and long-dated yields kept climbing, Treasury Secretary Scott Bessent tripled the cap on the first expanded buyback to $6 billion. As we noted at the time, yields surged anyway, since $6 billion barely registers against more than $2 trillion in gross issuance a year.

Bessent, for his part, prefers to talk about growth. In June 2025 he told CBS’s Margaret Brennan that “everything has been alarmist” on inflation and that the US would never default. And the day after Treasury reported the $40 trillion milestone, he went on CNBC to say there was “nothing magic” about the number and “we can grow our way out of that.”

The Part He Left Out

Last year we ran a piece arguing Bessent was effectively putting the national debt on an adjustable-rate mortgage by leaning on floating-rate financing, which also projected the debt would top $40 trillion by the end of fiscal 2026 – it got there in mid-August, about six weeks ahead of schedule.

Back in April 2025, Bloomberg’s Simon White made the case that higher inflation and a weaker dollar – where US policy seemed to be headed – were consistent with a falling debt burden. But he warned that unlike Britain’s post-WWII “beautiful deleveraging,” erratic policymaking could wreck trust in the dollar system, spark capital flight and end up adding to the debt.

Nick Giambruno spelled out the mechanics in July: financial repression, where the government keeps interest rates below inflation and the difference quietly moves wealth from savers to the Treasury. With 9% inflation and 4% rates, he noted, that’s a 5% transfer every year, and it compounds.

It has worked before. A 2011 BIS paper estimated negative real rates wiped out debt worth 2-3% of GDP a year in the US and UK between the late 1940s and the 1970s. But that was under Bretton Woods, with interest-rate caps, captive domestic buyers and capital controls – and the paper found financial repression works best “when accompanied by a steady dose of inflation.”

The catch is that it only works if the Treasury can borrow below the inflation rate. Right now it can’t: the 10-year yields nearly two points more than headline CPI, interest on the debt already runs over $1 trillion a year, and everything that matures gets rolled at today’s rates.

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We Are at the Mercy of the Fed, Whose Leaders Believe that Printing Money Solves Every Other Problem

I’m sure that most of the discussions in the closed-door meetings at the Fed’s recent Jackson Hole Symposium centered on the problems of printability. They certainly won’t be part of the paper presentations or press conferences.

The US government has been spending like a teenager with an unlimited credit card that they don’t have to pay off since going off the gold standard.

The Fed doesn’t even have a monetary policy in any sense. It’s been playing games for more than a quarter century, really ever since 1971, and even earlier going back to its very beginning of the Fed. These games center on the problems of printability. The Fed prints as it pleases and it wants to please its masters.

Its mandate is not CPI inflation rate target or the Unemployment Rate target of the “natural rate of unemployment”—that is a tall tale to gain public acceptance and gain credibility for itself. They are like two warning buoys in a harbor, but not their real goals.

Their real mandate is also two-fold. It’s to serve the interests of the state, especially to facilitate budget deficits and the national debt and to serve the interests of the big banks.

The only role the working-class plays is a byproduct of the real mandates: if some families temporarily benefit from Fed activities, so be it. It especially has a political role to fool the voters around election times. That is why politicians are now so “concerned” with beef prices, diesel fuel prices, and mortgage interest rates. Their real concern is to get reelected and to stay in power.

That is where “printability” comes into play. With a central bank, the Fed, all the problems of government and society can seemingly be addressed with the Fed printing more money. New spending programs, new wars, new subsidies, welfare benefits, etc. are all made possible with a few keyboard entries on a computer at the New York Fed.

The price inflation only comes later as the money makes its way through the hands of the banks, the government, and to businesses that end up driving up resource costs. Eventually, in the end, higher prices emerge and, even later, higher wages. After that, unemployment and bankruptcy result and the cycle begins anew. The citizenry is none the wiser as few people figure out the Fed’s game as it once again “comes to the rescue!” with lower interest rates.

The biggest problem with printability is how it affects political behavior and social ideology. Do you live under a budget constraint or not? Without a budget constraint, people and politicians assume that government can solve all our problems at no cost and politicians (who are very short-term oriented) spend without constraint. They vote for everything. They go along with stupid wars and policies. They pass budgets with huge deficits. They go unconcerned with the national debt. Americans and their government are now completely dependent on keeping the monetary spigot opening ever wider.

This cycle is of a historically long duration thanks to the appearance of the covid situation and the Fed’s and the government’s $10 trillion bailout. Then, when CPI inflation skyrocketed and they had to cut back a little, they started through the back door. releasing their hoard of $2.5 trillion in Repurchase Agreements through the banks and the stock market took off.

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‘Survival Mode’ – Farmers Crushed As Trump’s War On Iran Sends Diesel Cost Soaring

As Donald Trump’s war on Iran nears the seven-month mark, the economic damage is reverberating all over the world, and all across the United States. Among the Americans who are feeling the most pain from a war their federal legislators never declared are the nation’s farmers, who are growing increasingly desperate under the weight of rising costs for diesel, fertilizer and equipment.

It’s a demographic that leans hard to the right, but now feels let down by Trump and others in Washington. “It’s his war that caused this, this war in Iran. We’re not winning that war. And many farmers feel like we shouldn’t be there,” farmer John Boyd, Jr told CNN. Trump says the war in Iran is necessary to prevent the country from building a nuclear weapon. However, going back to 2007 and up to the eve of the war, the US intelligence committee has repeatedly assessed that Iran was not building one. 

“I’ve done this 34 years. I have never worried and stressed like I have the last year,” North Carolina farmer Matt Bell told CBS News. “We’ve cut everything we can cut.” Trying every option he can think of to improve his cash flow, Bell has put off replacing equipment, produced some of his own fertilizer, and opened a pumpkin patch and hayride business for the fall. The rising costs come after a difficult period had already weakened his operation’s financial security. 

“The last several years in agriculture have been terrible, and we have just cut the fat anywhere we could. But we’re just getting to the point now there’s nothing left to cut. You cannot run without fuel. You cannot run without fertilizer. You have to have that,” Bell said. 

As a result of a major reduction in oil exports from the Persian Gulf, the nationwide average cost for a gallon of diesel hit $6.49 this week, up 75% from a year ago, according to the AAA. Lately, the price volatility has led Bell’s diesel distributors to offer price quotations that are only good for a matter of hours. He’d budgeted $35,000 for fuel in 2026, but blew past that number in August. “Every piece of equipment on this farm runs on diesel,” he emphasized. 

In an interview with Sky News, Texas cattle rancher Lynn Fleming said her August outlay for few was almost double what she’d paid in recent years. “Obviously the main [factor] is what we’re facing everyday with the Iranian situation,” Fleming said. Her husband, Robert, said he felt blindsided by the war. “We had no idea that he was going to pull the prank with the Strait of Hormuz. He didn’t tell us … he was going to go do the military maneuvers and try to control the oil supply over there. We had no warning of what was going to happen.” A major cornerstone of Trump’s 2024 campaign was his pledge to be a “peace president” who would refrain from starting any new wars.    

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As Gas Prices Soar, Congress Goes Home

Instead of six more weeks of winter, we will have at least six more weeks of war, brought to us by Secretary Hegseth and his boss, President Trump, with the help of Speaker Johnson who avoided a procedural vote, taking it upon himself to adjourn, under the Rule 1, Clause 13, of the House of Representatives.

Consider. The Administration, compelled by Israeli interests, has driven America into a war of choice against a nation that represented no threat to our country. The war against Iran is becoming more dangerous every day, more casualties, more expense, and more devastating economic and moral consequences.

On September 15, the House of Representatives expressed its constitutional will and voted 220–204 to direct the President to end American participation in the war against Iran.

This constitutional crisis extends beyond one resolution or one cabinet secretary. The House exists as an independent branch of government, with its own authority over war, appropriations and impeachment.

The Speaker, by preventing a recorded vote on the Hegseth Impeachment and sending members home, prevented the House from exercising one of its most consequential checks on executive power. The practical effect was to protect the Administration from an immediate confrontation with a chamber that had voted to end the war.

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The Crippling Effects of Unnecessary War

In California, gas stations are facing a unique challenge. The station signs are only configured to go up to $9.99 per gallon and at several stations the price of diesel has reached that maximum. Diesel prices are higher than they have ever been in history.

Worse, according to some news reports the advertising of the maximum price of $9.99 per gallon is meant to signal to truck drivers that they have run out of diesel altogether. Expensive diesel is a hit to the economy, but running out of the fuel at any price is a whole different kind of crisis.

Our highways are filled with semi-trucks burning diesel to bring the products we depend on to the markets. Our freight trains use diesel to transport what is not transported by truck. When the price of diesel increases, the cost of everything moved by that diesel also increases. This is one reason we are seeing much more inflation than the government wants to admit.

The diesel crisis is getting so serious that even President Trump has been forced to admit it. Of course, instead of taking at least part of the blame over his war of choice against Iran and his continuation of the proxy war against Russia through Ukraine, he is blaming Ukraine’s military strikes on Russian energy infrastructure.

President Trump is now asking Ukraine to stop attacking Russian energy resources because diesel is a global commodity and the scarcity produced by the attacks is hitting us here at home. But the strikes deep inside Russia are guided by US intelligence, which provides the targeting data for Ukraine.

The Russia/Ukraine war is only part of the problem. Despite President Trump’s bluster about controlling the Strait of Hormuz, the fact is Iran is in control and very little oil – or anything else – makes it out without Iranian approval.

Yemen’s Iran-allied Houthis joining the fight only makes matters worse. Over the weekend they attacked Saudi Arabia’s bypass pipeline, taking much more oil off the market.

The real problem here is not oil or diesel. The real problem is that wars of choice spin out of control and destroy the economies of those who launch them. Empires throughout history have been undone by endless overseas wars. No amount of bragging about the size and strength of our military can change this reality.

Now we are seeing the chickens coming home to roost.

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Trump Promises $5,000 Dividend To Every American Adult If Republicans Hold Congress

In Dallas last night, President Trump promised the American people that if the GOP keeps the House and the Senate, every adult citizen will receive $5,000 in a direct dividend from his tariffs.

Speaking at the American Airlines Center in Dallas on Wednesday evening, Trump explained that the $5,000 payment would be issued by the President if Republicans maintain control of the House of Representatives and Senate, thanks to their America First economic strategy that globalists predicted would never work. “Very much like a successful company will do a cash distribution to its shareholders,” he said of the payment.

The reason the profits of tariffs are to be distributed to the adult citizens of the country in the form of dividends is because for decades the politicians in Washington have been running the country into the ground, waging foreign wars, spending trillions of dollars of NATO revenues and other foreign pay to conduct bureaucratic busy work and fail to enhance the prosperity of American working citizens and businesses.

“Very much like a successful company will do a cash distribution to its shareholders,” Trump said.

It has to be spent in the United States, he explained. So, no money can be spent in Canada, or China, or Germany for example. It is a closed economic system that rewards American businesses and American workers for their country’s success.

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