Explaining the upset with the Biden economy

 American Update:

Democrat economist Lawrence Summers released a paper in February that could help explain Americans’ current dissatisfaction with the economy and also President Joe Biden’s low poll numbers.

Summers, along with two other economists, proposed that high interest rates have effectively raised prices for Americans in a way that is not captured in government inflation estimates, providing another reason why consumers are upset with the economy under Biden, according to the study. The president has consistently tried to paint the picture that the economy is doing well, pointing to high growth estimates and decelerating inflation, but former President Donald Trump is leading Biden in projections of the 2024 presidential election by 2 points as of Wednesday, with Trump having consistently held a national lead since October, according to data from Real Clear Polling.

“Today’s economy is highly dependent on cheap credit and currency debasement,” E.J. Antoni, a research fellow at the Heritage Foundation’s Grover M. Hermann Center for the Federal Budget, told the Daily Caller News Foundation. “As soon as unrealistically low interest rates disappear, however, the music stops and lots of people are left without a chair… This is a significant part of the explanation for why people view the economy so negatively today; official metrics are not accurately capturing what most Americans are facing on a daily basis.”

Interest rates are experiencing huge upward pressure from hikes in the federal funds rate, which has been put in a range of 5.25% and 5.50%, the highest range in 23 years. Particular forms of credit, like mortgage rates, are especially susceptible to rate hikes as they closely follow Treasury yields.

The average for a 30-year mortgage reached a 23-year peak of nearly 8% in October and has since moderated slightly to nearly 7%, far higher than the end of 2020, when the average was below 3%, according to the Federal Reserve Bank of St. Louis. In conjunction with high borrowing rates, home prices surged by 6.1% in 2023 compared to the previous year in the top 20 largest cities.

“This is much more in line with what the American people are feeling, given that we do not buy houses and cars with cash; we buy them on credit,” Michael Faulkender, chief economist at the America First Policy Institute, told the DCNF. “Therefore, one has to take into account the much higher interest rate environment to understand the impact Bidenomics has had on household budgets.”
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These are Democrats telling the truth about the Biden economy.  It was Biden's reckless spending that caused the inflation now being experienced. 

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