(TheRedAlertNews.com) – In what can only be described as a nightmare scenario coming true, the United States economy is exhibiting indicators of stagflation, characterized by declining growth and escalating prices that are affecting the average American, according to experts.
In the first quarter of 2024, the U.S. reported an annual economic growth rate of merely 1.6%, coinciding with a persistently high inflation rate of 3.5% year-over-year in March.
This combination of sluggish growth and rampant inflation, compounded by sustained high levels of government expenditure and debt, signals the onset of stagflation, a condition that severely impacted U.S. consumers during the 1970s, experts told The Daily Caller.
“It’s not so much that we risk stagflation as we’re already there,” commented E.J. Antoni, a research fellow at the Heritage Foundation’s Grover M. Hermann Center for the Federal Budget.
“We have basically pulled forward trillions of dollars of economic growth by borrowing from the future, but that must be repaid at some point. And it is highly inefficient as well,” the expert added.
Stagflation, a complex economic anomaly, manifests as slow growth, high unemployment, and sustained high inflation.
It is particularly challenging to remedy because solutions for one aspect may intensify the others, as described by Investopedia. The most notable occurrence of stagflation was during the 1970s, following an oil crisis.
As of the beginning of 2024, the U.S. national debt exceeded $34 trillion for the first time, approaching nearly $34.6 trillion, according to the Treasury Department.
Since President Joe Biden assumed office in January 2021, the national debt has increased by approximately $6.8 trillion.
“Stagflation is the inevitable result of Bidenomics,” said Michael Faulkender, chief economist at the America First Policy Institute.
“When you massively increase spending, whether green subsidies or student loan forgiveness, while simultaneously reducing the ability of the economy to produce because of all the regulatory restrictions being imposed, you get reductions in growth with higher prices. If Bidenomics continues, then we should expect stagflation to continue,” he elaborated.
President Biden has integrated high-spending policies into his broader agenda, signing the $1.9 trillion American Rescue Plan in March 2021 and the $1.2 trillion Bipartisan Infrastructure Law in November 2021.
Additionally, he signed the Inflation Reduction Act in August 2022, which authorized $750 billion in new spending, including $370 billion dedicated to green initiatives aimed at combating climate change.
The latest proposal from the Biden administration to forgive student loans is projected to cost approximately $559 billion over the next decade through various loan cancellations and interest suspensions. One of President Biden’s previous, more costly plans for student loan forgiveness was invalidated by the Supreme Court in June 2023.
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