Why Inflation is Getting Worse and Won't Improve (Plus, Why Middle Class is Shrinking)

Hey everyone, welcome back to the channel! Today, we're diving deep into the controversial topic of the federal government's role in our current economic state. Are we headed for an economic depression? Let's break it down. First up, federal spending. There's a lot of talk about how massive government spending is crowding out the private sector and driving inflation through the roof. You might be wondering, what's the real impact of all these new jobs we're hearing about? Well, it turns out a huge chunk—179,000 to be exact—are government jobs. And let's face it, many argue these aren't "real" jobs but rather a burden on taxpayers, offering little to no economic output. And yes, these "fake" jobs created with "fake" money are fueling inflation, hurting people across America.

But it's not just about job creation. Government jobs, while necessary in areas like law enforcement and firefighting, don't drive economic growth. Much of what the government does is seen as an unnecessary economic drain. Now, let's talk about the middle class. Since the 1970s, we've seen a decline. Remember when Nixon decoupled the dollar from gold? That shift to a fiat currency has had long-lasting effects. Middle-class households have dropped from 61% in the '70s to just 51% in 2023, while lower-income households have risen from 27% to 30%. Credit card debt is another alarming trend. It's increased by the highest amount since February, with the average rate hitting a record 22.76%! And then there's the US Misery Index, which tracks unemployment and inflation. It's been climbing since 2023. The dollar has lost 24% of its value since 2019, and we've seen negative wage growth of 0.6% between 2021 and 2024. Temporary workers have declined by 49,000 in June alone, with a total loss of 515,000 since 2022—clear signs the labor market is cooling off. Finally, let's talk about the fiscal deficit. The US government is borrowing a staggering $2 trillion per year. Raising taxes to cover this deficit isn't feasible without tanking the economy, and even then, it wouldn't generate enough output to pay it off. Current policies seem to be making everyone poorer, with the middle class shrinking more each day. Latest government data suggests that inflation is at 2.6%--but Federal Reserve said they have not declared victory yet. Odds do favor some interest rate cuts in September. At the same time, the Federal Reserve has said that they are not in an hurry to cut rates.

So, what do you think? Is the federal government steering us toward economic disaster? Let me know your thoughts in the comments below, and don't forget to like, subscribe, and hit that notification bell for more deep dives into today's hottest economic issues!

As always, all information provided is for entertainment purposes only. Please consult a professional for specific advice.

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