Economist and author Dr. Jack Rasmus, co-founder of ProChain Capital David Tawil, and chief market strategist at BubbaTrading.com Todd “Bubba” Horwitz cast doubt on the US government’s claims of economic boom.
The US could be heading for economic turmoil again 15 years after the 2008 financial crisis rocked the country, three experts have said.
Global finance giant Lehman Brothers filed for bankruptcy on September 15, 2008, more than 150 years after its founding. It was the first major US victim of the sub-prime mortgage collapse.
The first warning of the Credit Crunch came a year earlier, with the run small regional British mortgage lender Northern Rock after it asked the Bank of England for liquidity support due to its dangerously overleveraged securitisation-based business model.
Politicians and economists insisted the Northern Rock collapse was a one-off and did not portend a general crisis — which hit the world a year later.
Huge taxpayer-funded bail-outs of banks deemed “too big to fail” were accompanied by government austerity measures that cut social spending and prompted unrest across the West.
Economist Dr. Jack Rasmus told Sputnik that the government’s response to crises was to give with one hand and take away with the other, throwing people back into poverty.
“During the COVID crisis and the shutdown, certain programs were created, social programs, in other words, to keep the country from totally crashing,” Rasmus said. “But those social programs have been pulled. As soon as it appeared that the economy was reopening, the [US] Democrats began shifting the spending from social programs to subsidizing corporate investment.”
“These programs included childcare, which was the number one biggest contributor to ending poverty, but it only lasted six months. And when they pulled that, people were right back into poverty.”
He pointed out that former president Barack Obama had used the same sleight of hand following the 2008-09 crisis.
“Obama spent $787 billion as a rescue and then two years later, he agreed with Republicans to cut spending programs, education and everything by over $1 trillion,” Rasmus said. “So they give with one hand during the crisis, and when the crisis is over, they take it back.”
“That’s exactly what Biden has done. This time, they spent over $2 trillion in these social programs: unemployment, benefits and the checks, and child care, and so forth, $2 trillion,” the commentator added. “But then in 2022, they shut it down. [Former House Speaker Nancy] Pelosi and Biden did a trick on [former Democrat presidential runner Bernie] Sanders and shut down the Build Back Better bill, which was supposed to continue these programs.
Wealth manager David Tawil told Sputnik that while the US Federal Reserve was trying to create a new credit crunch to control inflation by hiking interest rates, that would only have an effect once the remaining COVID stimulus money the Fed printed virtually had been spent.
“It takes time for the increase in rates by the Fed to go ahead and work their way through the economy and put enough pressure on spenders, consumers, to go ahead and pull back on their spending,” Tawil said. “You couple that with the fact that consumers have had a lot of excess cash as a result of COVID stimulus… people just went wild in terms of their spending. Their spending capabilities became incredible. And so, therefore, that drove prices up.”
While President Joe Biden has been claiming success for his administration’s so-called “Bidenomics” policies, growth is about to hit a brick wall, some think.
“There was a ton of money that was injected into the system. Now, this pullback that has to happen here. The party has to end,” Tawil warned. “It can’t go on forever because then it becomes a problem for the federal government. But our government’s balance sheet is broken and so therefore, the party has to end.”
Market expert Todd “Bubba” Horwitz told Sputnik that a major problem was the “lying media” that “give you false information along with the president who with his new commercials, telling you what a great job he has done for the economy.”
He said the official inflation figure of 3.7 percent was a “laughable joke,” and the real rate was about 20 percent.
“The 3.7 percent excludes food and energy and the small percentage of use of food and energy is four percent of the total of the total gauge. So if you tell me that the average person, only four percent of their money goes towards food and energy, I’d call you crazy,” Horwitz said. “Other than an emergency, our number one expense, this food and energy go. You got to fill up your car. You got to heat your home. You guys eat food, you got to feed your family.”
“Food continues to rise, crude oil continues to rise, gas at the pump continues to rise, heating continues to rise, employment costs continue to rise. ‘Bidenomics’ is a total failure, as is the entire administration, from taking care of the economy,” he added.
The market trader blamed a large part of that inflation on state and federal excise taxes on vehicle fuel. “So they get gas prices higher. They’re getting more tax dollars from the American people, which is exactly why inflation out of control is out of control.”
He also cast doubt on the White House’s rosy economic outlook.
“I don’t care what anybody says, we’re in a recession,” Horwitz said. “We are not flourishing as they would like to believe. The government says that we’ve gained jobs, but the actual numbers and the facts are that we’ve lost 514,000 jobs in calendar year 2023. So those are the reasons why the numbers are all garbage.”
