There is some optimism in the U. S. economy, but it faces significant structural issues like inflation, a weak job market, and problems in small businesses. Consumers are struggling, and government finances are in poor condition. While the U. S. economy may appear better compared to others globally, its problems remain unresolved.
China's growth figures have also come under scrutiny, as an economist revealed that the actual growth rate is likely much lower than officially reported. This pattern of silencing voices that challenge government figures is becoming more common worldwide. In the U. S. , however, there is still room for open discussion about economic challenges.
U. S. inflation has risen since September 2021, currently at 3 percent, which is significantly higher than the target. The inflation experienced over the last four years may be as bad as that of the 1970s, and the government has improved its methods of masking the true situation. Though official measures say the dollar has lost 22 cents in purchasing power, many people feel it's closer to a 40-cent loss due to price hikes in essentials. This inflation, if it were to stop today, will still leave lasting effects on the economy.
Despite efforts by Congress and the Federal Reserve to combat inflation, spending has only increased public debt. Although there was an initial attempt to limit money supply, a new wave of quantitative easing began, adding over $1 trillion in new dollars to the economy. This could be a result of political maneuvering ahead of elections, leaving the new administration with a challenging situation to navigate.
The job market is also struggling, with significant drops in employment ratios and participation rates. Many who were affected by the lockdowns haven't returned to work, and issues like childcare availability are impacting women in the workforce. Reports indicate a growing divide in job opportunities, with many office positions becoming scarce while hands-on service jobs remain available.
Government finances are troubling, with debt levels echoing those of World War II. Proposals to cut federal spending have surfaced but seem to have lost momentum. The current regulatory environment hampers productivity, and changes are needed to streamline processes. The next administration will face the daunting task of addressing these issues while managing public expectations, as economic realities could lead to a recession that complicates efforts for tax cuts and other initiatives.
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