May 26, 2022
CNBC is whistling past the graveyard, telling Americans to believe them and not their lying eyes.
First, they claim the CBO says inflation has topped and will reduce to 2%.
Right. This from the same people who told us this was a temporary thing caused by disrupted supply chains and an "overheated" economy. They were wrong then and are wrong now.
Second, they claim there is NO CHANCE of a recession, much less a depression.
No recession ahead: Evercore ISI predicts S&P 500 will jump 22% from current levels
Um, ri-ight.
All indicators suggest a nasty recession and possible depression, possibly as bad or worse than the Great Depression. But believe us rather than your lying eyes!
Some commenters are blaming this on the labor shortage and...drumroll please...calling for more immigration to take jobs "Americans just won't do" to shore up the economy!
This has nothing to do with an overheated economy or labor shortage. It has everything to do with a massive expansion of the money supply. The Federal Reserve has exploded the money supply in the last year , and Congress has blown through massive amounts of money. Inflation is a monetary problem. This is in no way related to an "overheating" of the economy.
And the labor shortage? Now why do we have a labor shortage when before the pandemic we had no problem? It's because so many people are still not working thanks to government handouts.
Bringing in aliens is not a solution. It means more taxpayer money to subsidize them, more services used, and a decline in wages. You don't want to suppress wages during an inflationary period.
In point of fact labor shortages present an opportunity to automate jobs and eliminate jobs "Americans just won't do". Bring people in to fill those jobs and you add more takers to society.
Which suits the political class just fine; more voters they can buy to keep them in office. And don't kid yourself that they won't vote - or that their children won't be good shock troops for the establishment in both parties.
America is the third most populace country on Earth; we don't need more people. They use services; police, fire, hospitals, etc. They suck up funds - AFDC, Medicaid, etc. All of that has to be paid for with more monopoly money.
No, what we need is to restore fiscal sanity. Stop the spending, cut the money supply (slowly), and stop funding the unproductive.
I would add the Great Depression was caused primarily by the Federal Reserve which inflated the currency throughout the '20's then suddenly contracted it. Of course, Congress didn't help by imposing new tariffs and the like, but the crash was caused by the sudden contraction of the money supply after a decade of loose fiscal policy. We are in an almost identical situation. We MUST rein in spending and the money in circulation. We cannot continue to allow so much to float around out there. But if we contract too quickly the economy will collapse. We are facing either stagflation or depression.
The pandemic and disruption of the supply chains only exacerbated a problem that already existed.
CNBC is trying to keep the Democrats in the game by finding excuses for them - and promising prosperity is just around the corner.
In 1929 Herbert Hoover, the Wonder Boy (as Calvin Coolidge mockingly called him) said on a radio broadcast "good times are right around the corner" and we had to endure 16 more bad years, which we only escaped from via a world war and the subsequent reconstruction that made America rich. This is more of the same.
No, this economy is in serious trouble. You cannot spend tens of trillions of dollars and expect to sail to prosperity.
The entire U.S. economy is $18 trillion dollars. That's everything. We have spent $3390.92 Billion in the first quarter of 2021 alone. In 2021 the Federal Government collected d $4.05 trillion in total revenue but still spent 2.77 TRILLION over that budget. (30% of total GDP.)
See this table:
2021 $2,772 $1,484 12.1%
2020 $3,132 $4,226 15.0%
2019 $984 $1,203 4.6%
2018 $779 $1,271 3.8%
Notice how high the GDP to debt ratio has risen in the last two years.
The reality is that all of that money is lost to the economy. It has gone from productive capital to non-productive lucre. You cannot take that much out of the economy and expect to not have it tank.
We are facing a disaster, no question. CNBC can twist and squirm and lie all they please but in the end numbers are tyrants, and no amount of wishing won't make them go away.
Posted by: Timothy Birdnow at
09:53 AM
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