Charlotte, NC — Throughout the Trump administration, the United States economy was roaring along with no apparent end in sight. The stock markets were booming, unemployment was the lowest it had been in decades. Not one single segment of the economy was without growth and it was helping Americans of every social class.
That was until 2020 and the global pandemic hit. “Experts” said that we should close everything and force everyone into submission with restrictions and guidelines to follow. Americans were not allowed to freely travel about, dealing with restrictions, capacity limitations, and most of all supply shortages of items due to sheer panic. It was the absolute best-case scenario for Democrats.
Now we sit at the end of the first quarter of the Joe Biden administration and economists across all spectrums believe that the US economy is ready for a major boom. One said that the expectation was 6-8% growth in the first quarter, an amazing number given that the majority of the US economy is still under restrictions and Democrat control. Nationally, the growth rate was -3.5% for 2020 and all can be traced back to the government regulations on the economy as the reason.
But will the record pace of the Trump administration really come back? Will the economy really experience the amazing boom that is being predicted by economists? Not so fast!
There are many aspects of the economy that must be considered before we can jump to the conclusion that the US economy will come roaring back to its pre-pandemic state.
The first major concern is inflation. Inflation is on the rise, rising from 1.7% to 2.6%, marking faster growth than the actual economy itself. What does this mean? It means that the products that you use every day are costing more than ever before. In fact, consumer products rose each of the first three months of this year, nearing a nearly 8% inflation rate in the month of March.
As the commodity prices rise, so will the spending for those items. While it gives the economy the appearance of performing strong, it results in less money in the pockets of Americans for additional discretionary spending. So while Americans may be purchasing gas, energy, or even soda, they will be spending less on other areas of the economy. Not to mention the continued push for a $15 minimum wage. If the federal government changes the minimum wage, prices will only soar higher.
It’s not just the inflation question, but also the employment question that is a big issue as well. If you drive down any American highway, you will not go far without seeing a help-wanted sign. Businesses across the country are needing workers, but they cannot find them. Here’s one example in Virginia, where businesses have the demand but are unable to find the workers to staff appropriately. It’s leading to closures, significant delays, and even business failures in some instances.
It’s not just the restaurant business either. Even the strong performing industries, like health care and finance, are struggling with finding qualified workers. And it will not improve anytime soon.
The hope is that workers will want to return to the workforce once the “herd immunity” is reached through the vaccine. Many expect that to take place by June, but with unemployment benefits extended well into September by Joe Biden, do not look for any improvement. Many workers can easily stay at home and make equal or more pay through their unemployment benefits rather than returning to the workforce.
The Democrats continue their talks about another potential round of coronavirus aid, including more payments to Americans. The more aid and more payments that are made, the further it will push our economy into the hole. It also creates a situation in which people are more open to the idea that the federal government can support them financially, rather than working for a living. Say hello to Universal Basic Income.
So the idea is that money will be present in the economy and that may be true. The Democrats will work to make sure that Americans have “money” in their pockets no matter how much more public debt is created. The problem is that the lack of employees and increasing inflation will stagnate any potential growth for businesses.
Joe Biden believes that the government can be the main driver of the economy and can provide the jobs necessary to keep America growing. The government is not the main driver of the economy, however, it’s the private sector. The only place the government is driving the economy is into destruction, far away from the Trump economy that benefited Americans across the country.
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