The government and the Federal Reserve’s Modern Monetary Theory (MMT) is flawed.
There are several key problems that they keep doubling down on, exacerbating the problems instead of fixing them.
The problems are:
- Unlimited spending doesn’t solve all economic problems… It makes it worse.
- The government and Federal Reserve’s leeway to print money as needed. This devalues the dollar, causes inflation, and kills jobs and the economy.
The Federal Reserve has raised interest rates 10 times in a row. In the month of June, they put a pause, with a warning that in July and beyond, there may be more rate increases.
The Fed is using an ideologically driven Modern Monetary Theory (MMT), which has proven to be a failure.
They really don’t know what they are doing, and they are only guessing.
They are guessing wrong.
The U.S. Fed and the central banks around the world have let inflation get out of control, and they really don’t know what to do.
Central planning doesn’t work.
As they ignore the laws of economics and pursue fantasy economics based on socialist ideology, our economy suffers.
A recession and inflation are producing stagflation, despite victory declarations.
Inflation is not dead, and a recession will probably get deeper.
Here is a brief Reality Check on facts you should be aware of.
Reality Check #1: Jobs
Politicians, Deep State bureaucrats, and the media are spreading lies. Here’s an example:
Claim: President Biden created 13 million new jobs since taking office
Reality: Most of those “new” jobs were jobs that became vacant due to COVID lockdowns. Many companies and manufacturing were closed during COVID lockdowns putting people out of work. But when companies and manufacturing started operating again, laid-off workers were called back to work.
It was from COVID recovery, not economic growth creating new jobs.
Here are the stats:
160.7 million jobs in 2023
159.6 million jobs in 2020
1.1 million more jobs than pre-COVID, mostly added by government and medical jobs.
The Biden Administration’s economic policies have destroyed the middle class, killed savings, and lost over $70 trillion in market cap. Fed rate hikes have created a business and real estate slowdown and a banking crisis.
It’s because of bad policies, such as:
Reality Check #2: Unnecessary Regulations Killing Jobs, income and Opportunity
The “unintended consequences” of regulations are harmful to everyone, especially the poor because regulations drive up the cost of doing business.
Businesses have to spend more to comply with state and federal government regulations, which results in higher prices.
Unfortunately, the goods and services to which the middle class and poor need, such as energy and food, are also the most heavily regulated.
When you Compare the growth rate of prices versus the growth rate of regulations over time, the data show that a 10% increase in total regulations leads to a 0.687% increase in consumer prices.
Add on inflation caused by government overspending, and it puts a tremendous burden on consumers.
When I was on Neil Cavuto’s Fox News show, he asked me what the greatest job killer for businesses was… He expected me to say taxes, but I surprised him by saying it was regulations.
Reality Check #3: Inflation
There has been 14.9% (Real inflation) since Biden took office.
It’s not just the price of goods and services you buy… Inflation is affecting income.
People’s incomes in real terms are falling—You have roughly lost $2,000 to $3,000 a year as prices have risen.
Real wages have fallen by a negative 3.2%. In fact, real wages are down 26 straight months, with everyone becoming poorer every month.
Mortgage payments are 94% higher than a year ago.
Inflation has risen so high and so fast that prices will never come down.
But according to Biden and Treasury Secretary Yellen, everything is great.
They told us as trillions of dollars were pumped into the economy by federal overspending:
- There’s no inflation
- Then they said inflation was transitory
- Then they said inflation was short term
- Then they said inflation was Under control
But the one key factor for inflation is government spending. The more the government spends, the more it devalues the dollar.
Reality Check #4: President Biden said that there was “nothing inevitable about a recession.” However, many economists believe the U.S. is already in a mild recession.
The Commerce Department reported that the Gross Domestic product (GDP) decreased at an annual rate of 1.5% in the first quarter of 2024.
And economist Steve Moore says, “The first six months of the year have been negative for growth.”
Reality Check #5: Gas and energy are still hurting you and the economy
In the last 6 months, the price of oil has fallen by 7.7%. In the past year, it’s fallen by 37%… this has lowered consumer price inflation to around 4%.
The Biden Administration’s policy of “no drilling” or reduced oil production has put us in a very dangerous situation… We must rely on OPEC, which has already cut its oil production by more than a million barrels a day… And Saudi Arabia is following.
That’s why oil prices fell, but as demand increases, the prices will go up. The other reason that oil prices fell was that demand in Europe fell because they were also falling into a recession.
However, Russia has been flooding the market with oil, as they are ramping up oil production to fill the void Biden created when he slashed American oil production… So, Russia is getting richer, and their economy is booming, while we are getting poorer, and our economy is headed for a recession.
And although energy prices have fallen by 3.6%, the demand for energy will ease prices back up, especially during summer months, when people travel. When energy prices rise, core inflation is estimated to rise above 5%.
Reality Check #5: Interest Rates have crushed jobs and growth
In one year, interest rates have risen more than the past 15 years combined.
In fact, the Fed hiked rates 10 times:
- March 2022: 25 basis points
- May 2022: 50 basis points
- June 2022: 75 basis points
- July 2022: 75 basis points
- September 2022: 75 basis points
- November 2022: 75 basis points
- December 2022: 50 basis points
- February 2023: 25 basis points
- March 2023: 25 basis points
- May 2023: 25 basis points
Reality Check #6: The National Debt
The national debt is over $31.5 trillion.
The national debt has increased by roughly $3.5 trillion under the Biden administration.
Year-on-year, the debt has never decreased since 1957.
In order to address the debt crisis, Congress passed, and the president signed the “bi-partisan” Fiscal Responsibility Act—
However, the bill raises the debt limit and doesn’t cut or limit entitlement spending, which is the biggest slice of our spending pie.
It does cut some federal spending, including cuts to some of Biden’s health and climate programs… but not much to move the needle downward.
The Fiscal Responsibility Act is more like the fiscal irresponsibility act.