Democrat economic policy failures
The Democratic Party’s faithful are whistling past the graveyard, hoping with all their might we’ll avoid an economic slide. As a matter of general economics, we’re already in a recession. And it looks like things will soon get worse, not better.
“We hope we can have what they say, ‘a soft landing,’ a transition to a place where we don’t lose the gains that I ran to make in the first place for middle-class folks, being able to generate good-paying jobs and — expansion,” President Joe Biden told CBS’ 60 Minutes last month.
Good luck with that, Mr. President. Even members of your own party think it’s hogwash.
As economist Larry Summers, who advised both Presidents Bill Clinton and Barack Obama, said last week, a soft landing is “really quite unlikely.” We agree, as do most economists of our acquaintance.
Indeed, looking at the repeated economic policy mistakes made by Biden, or whoever now is really calling the shots in the White House, and the far-left Democrat-led Congress, it’s hard not to conclude that the economy’s set for a mighty fall.
Four trends stand out:
Stock and housing market declines. The stock market’s epic plunge has destroyed an estimated $11 trillion in wealth this year alone, while home prices, after peaking in June, have fallen sharply as interest rates jump above 6%. As home equity shrinks in a weakening housing market, consumers’ ability to borrow against their homes will also shrink.
What economists call “the reverse wealth effect” is now in play, meaning consumers and investors are likely to spend a lot less in the coming months.
Why is this happening? The federal government’s $5 trillion COVID spending binge, which the Fed enabled by keeping rates low; a $1.1 trillion “infrastructure” spending program; followed more recently by the laughably named Inflation Reduction Act, which will waste another $1 trillion or so before it’s done all of its damage.
All told, federal spending is up $9 trillion since 2021, an unparalleled increase. Now, with inflation roaring, the central bank is desperate.
The Democrats with Biden's help have destroyed what was a good economy under Trump. Their spending spree has created the worst inflation in 40 years and in the process has lowered the standard of living for most Americans.