Biden gets an 'F' in economics, to the detriment of America

Why is there such an emphasis on race by Joe Biden and the Democrats? Because that is all they have to maintain power. Why do they want to codify the 2020 election irregularities that were only put in place purportedly because of COVID? To cheat to win.

Gross Domestic Product lost 3.5% in 2020 because of the COVID-caused economic shut downs. To recover, 2021 needed to make up that 3.5% loss and also any amount for inflation. So, a 3.5% loss plus 5% expected inflation means that 2021 GDP needs to grow at least 8.5% just to get back to the same amount of net present value GDP as in 2019.

Many economists’ anticipated 7.2% growth to GDP for 2021 means that GDP of net present value after adjusting for inflation will still be 1.3% less than 2019 – meaning no recovery. If the actual inflation is 15%, as some economists suggest, then the USA is already in deep trouble without knowing it.

Now factor into the equation how much growth was lost in 2020 and 2021(opportunity cost) of at least 2.5% per year, so 2021 really needs to grow about 13.5% to catch up to where it should be. A GDP growth of 7.2% is way off the mark at 5% inflation and in a deep hole at 15% inflation.

This all means that Biden is way behind. There is and will be way too much inflation. “Disaster” is a good word for it.

How did it happen? The 75% oil price increase under Biden affects everything, and the Biden stimulus caused people not to work while giving them extra money to spend. Biden had no idea this would happen because he has always worked in government with no business experience (for 48 years). He just does not understand how the inflation he caused negates growth, how inflation hurts the buying power of average working Americans. And Biden does not know how to grow an economy without inflation caused by government spending.

GDP growth from inflation is not real growth. It is not product volume growth. Yes, stock market prices grow because of inflation (i.e., higher product prices/profits), but product volumes do not grow. Wall Street might be happy. Billionaire Biden donors might be happy. But product volumes drive employment, while inflated prices/profits do not. And that is the issue.

The Federal Reserve has a target of 2% inflation; 5% is more than twice that amount. When the Fed is forced to increase interest rates and stop buying bonds to fight inflation, then even stock prices will drop, because P to E (price to earning) ratios used to calculate stock prices will decrease. Those rich Biden donors will be appropriately PO’d.

The historical average for P to E ratios is 18 as compared to the current 30, which is 67% higher than the historical average. The near zero interest rates currently used to calculate the P to E ratios are driving up stock prices as P to E ratios increase – just as it was when Obama was president. At the historic P to E ratios of 18, the current stock prices are overvalued by 40%.

The Fed has a huge problem: How to fight inflation without hurting employment and stock prices too much.

Biden and the Democrats have failed, big time. They did not grow the economy without inflation. They did not grow the economy without massive government spending. Jimmy Carter is reincarnated in Biden. Oil shortages, inflation, high level of government spending, increasing taxes to pay for it all, falling employment participation percentage and understated real unemployment rates and inflation.

It took two years to feel the impact of Carter’s mistakes. How long will it take this time?

And how will Democrats and Biden save themselves politically? By dividing Americans by race, by playing the race card, by using race identity to campaign for votes as with Critical Race Theory, by rubbing race raw, by allowing more and more illegal immigrants into the United States and then by codifying the election irregularities that they used to win in 2020.

In other words, by doing everything possible to take attention off their inability to run the American capitalistic economy.

Content created by the WND News Center is available for re-publication without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact [email protected].


This article was originally published by the WND News Center.

Related Posts