July 25, 2024 | It’s a Recession Not a Depression

The government insists that the economy is fine, thriving perhaps, and has asked the public to pay no mind to their current financial situation. No one, aside from those living off government assistance, are better off now than they were four years ago. Americans cannot be gas lit into believing the economy is sound when every social-economic group is suffering.

Americans have already lost confidence in the economy and, therefore, in the government.

A recent poll by Affirm found that 3 in 5 Americans believe the US is in a recession, and most believe that recession began in March 2023. Another poll from Guardian/Harris found that 56% of Americans feel that the recession has already arrived. Seven in 10 Americans have reported that they are unable to save for the future. About 68% of respondents from the Affirm poll believe inflation has caused the recession, but few realize what causes inflation.

Credit card debt has reached an all-time high, with 8.9% of balances falling into delinquency as of May 2024. Bankruptcies are on the rise both personal and corporate. A CNN poll discovered that 39% of Americans worry that they may no longer be able to pay their bills. The poll saw similar sentiments during the Great Recession when 37% of Americans feared the next round of bills. Moody’s Analytics believes that household spending has risen $925 per month compared to three years due to inflation. Sixty-five percent of respondents said that the cost of living crisis is the most significant issue our nation faces. Politicians would be wise to focus on domestic issues as the people are on the brink.

Americans are spending more on less as economic conditions have begun to impact the average person’s quality of life. CNN also reported that 35% of adults are taking on second jobs to combat the price of living. Sixty-nine percent are spending less on entertainment, a correlation we have seen with corporate bankruptcies primarily rising in non-essential sectors. Another 41% say they cut down on driving to save on energy costs. Sixty-eight percent of American families have had to cut back on grocery spending, despite US Treasury Secretary Janet Yellen denying food inflation entirely.

Bidenomics failed. We are in a recession but not a depression. People hoard when they fear for the future, and that is happening not only as a result of economic conditions but geopolitical tensions and war will cause people to spend less. Then, to fund these wars and other spending packages, the government raises taxes, which is always recessionary. The computer had long warned that the American economy would turn down in May 2024 and not resurface until 2028.

Martin Armstrong July 25th, 2024

Posted In: Armstrong Economics

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