|Posted by JJ The Psychotherapist on January 29, 2023 at 1:40 AM||comments (0)|
GDP Showing Ominous Warning Sign Not Seen Since the Great Depression
Joe Biden has been boasting about his "economic plan working," however, it is unclear what that plan actually entails. If "working" means causing financial hardship for the American people, then the plan has been successful. Economic growth is slowing, residential investment is in decline, and the labor participation rate is lower than before the pandemic. One of the most troubling indicators is the drop in real disposable income, which fell over $1 trillion last year and is the second-largest drop since the Great Depression.
Consumers are struggling to keep up with inflation and are depleting their savings and burning through the "stimulus" checks they received during 2020 and 2021. Credit card debt is growing while savings have plummeted $1.6 trillion last year, falling below 2009 levels. This decline in consumer spending, which accounts for roughly two-thirds of GDP, bodes poorly for the economy.
The average family has lost about $6,000 in annual purchasing power under Biden because prices have risen so much faster than wages. Higher interest rates have increased annual borrowing costs by $1,400 so that the average family effectively has $7,400 less in their annual budget. However, this is just the average, someone trying to buy a median-priced home today will have a monthly mortgage payment that is 80 percent higher than when Biden took office, resulting in an extra $9,500 a year for the same house.
Many people are struggling financially and taking on second or third jobs in this economy. The Biden administration is not taking the necessary steps to address these issues, such as stopping excessive spending and negotiating the debt ceiling. Furthermore, the Biden team is lying about the facts and redefining what being in a recession is, so they can claim that the country is not in one. Joe's "economic plan" is only making things worse.