Recent titles for January jobs report Indicates a strong economy. But a more comprehensive look reveals the challenges Americans face.
One Announce the last title “Voters are finally seeing that Biden’s economy is working.” but Only 30 percent of Americans I think the economy is in good shape. When asked who would handle the economy better, people give former President Donald Trump an A A difference of 22 points President Biden.
Challenges include Increase in part-time employment In recent months, Decrease in domestic employment In three of the past four months, a net decline of 398,000 employers, Increasing public debt burdensAnd Real wages fallWhich has declined by 4.4 percent since January 2021.
Why these results? Biden's economy is based on cost Keynesian boom and bust policies. With so many hits, it's no wonder people are conflicted about the economy.
In the Latest jobs report For January, the net increase of 353,000 nonfarm payrolls from the establishments survey appears to be strong, as it was Much higher than the agreed estimate 185 thousand new job opportunities. But let's dig deeper.
Last month, family Employment decreased At 31 thousand, contrary to the titles. The discrepancy in jobs added between the household survey and the establishments survey widened Since March 2022. This period coincides with Real GDP decline In the first and second quarters of 2022 (usually). It is considered stagnationBut he Not yet). With these two employment levels indexed to 100 in January 2021, they were essentially the same until March 2022, but non-farm employment was 2.5% higher in January 2024.
While this difference It confuses some peopleThe main reason is how Surveys Done.
The Enterprise Survey provides answers from companies and a household survey of individual citizens. The establishment survey often counts the same person working multiple jobs, while the household survey counts each person employed. This likely explains a lot of the variation, as well Many people work multiple jobs To cover their expenses. The increase in part-time employment More frustrated workers Highlights the fragility of the labor market.
althoug Average weekly income It rose 3 percent in January compared to the previous year, which is less than inflation of 3.1 percent. Average real weekly earnings rose for seven months before falling last month. There were declines in average weekly earnings year-on-year for 24 of the previous 25 months before June 2023. These real wages are Down 4.4 percent since Biden took office In January 2021.
As purchasing power declines, debt accumulation becomes more urgent.
Total US household debt has reached unprecedented levels Credit card debt It has risen by 14.5% over the past year to a staggering $1.13 trillion in the last quarter of 2023. Such significant debt growth raises concerns about current (unsustainable?) consumption trends, business investment, and a looming financial crisis. .
The boom in Mortgage rates To more than seven percent for the first time since December and House prices rise Exacerbating housing affordability challenges, especially for aspiring homeowners. An integral part of what some consider the “American Dream,” Housing affordability It is a major factor discouraging Americans.
The euphoria surrounding the January 2024 jobs report is misplaced. Policymakers should heed these warning signs and implement meaningful reforms to address the root causes.
Biden's political approach supports most of these difficulties. Bioeconomics Focuses on it Build back better An agenda that chooses winners and losers by redistributing taxpayer money for supposedly large economic gains Deficit spending.
We did not see Agenda On this scale since Lyndon Johnson's Great Society in the 1960s or perhaps since Franklin Roosevelt's New Deal in the 1930s. Both were harmful, as the Great Society greatly expanded the size and scope of government, contributing to the great inflation of the 1970s. The New Deal contributed to a longer and harsher Great Depression.
Since January 2021 only, Congress passed The following major spending bills are upon request from Biden administration:
These four bills would add approximately $4.3 trillion to the national debt. but At least another $2.5 trillion Will be added to the national debt for student loan forgiveness plans, SNAP expansions, net interest increases, Ukraine financing, Charter lawAnd more. In total, over the past three years, excessive spending will add more than $7 trillion to the budget National debtwhich now totals $34 trillion – an increase of 21 percent since 2021. And there appears to be no end to high debt with recent discussions about more taxpayer money for Ukraine, Israel, borders and “Bipartisan tax deal“, collectively adding at least another $700 billion to debt over a decade.
Record debt owed by households and the federal government (paid by households) is not a sign of a strong economy. This is likely to get worse before it gets better, as household savings dry up. With interest rates likely to remain higher for longer due to persistent inflation, debt will crowd out household finances and the federal budget.
The Fed has monetized much of this growing national debt over the past few years by inflating it balance sheet From $4 trillion to $9 trillion and then back down to $7.6 trillion which is still inflated. This helps clarify Persistent inflationWidespread misallocation of resources and costly misinvestments across the economy have kept the economy afloat but fragile.
Excessive debt spending weighs heavily on future generations, burdening them with levels of unsustainable debt in which they have no voice. Today, everyone owes about $100,000, and taxpayers owe about $165,000, to the state. National debt. Of course, these amounts do not include hundreds of trillions of dollars in unfunded liabilities to the International Monetary Fund Fast bankruptcySocial welfare programmes Social security And medical care.
Future generations will be on the hook for more national debt if Bidenomics continues and Congress doesn't cut government spending now. This is why the national debt represents America's biggest national crisis. We are robbing current and future generations of their hopes and dreams.
Fortunately, there is a better way forward if politicians have the willpower. This path must be chosen before we reap the major costs of a larger crisis. I recently decided what this should look like In AER.
In short, we need a fiscal rule that sets a spending limit that covers the entire budget based on the maximum population growth rate plus inflation. There should also be a monetary base that ideally reduces and caps the Fed's current balance sheet to at least what it was before the shutdowns. My work with Americans for Tax Reform It shows that if the federal government had used this spending limit over the past 20 years, the debt would have increased by only $700 billion instead of the actual $20.2 trillion. This is more manageable and will guide us further Sustainable financial and monetary orientation.
Together, fiscal and monetary rules that rein in government will help reduce the roles that politicians and bureaucrats play in our lives so that we can achieve our uniquely American dreams. If not, we will have wasted a lot of dreams on a Biden economy that could make things look good on the surface, but cause rot underneath.
This was the article Published by AIER
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