Even as pump prices hit $8 a gallon in some states and rate hikes hit household incomes, Biden’s White House has been touting a booming economy. Dr. Jack Rasmus, professor of economics and political science at St. Mary’s College of California, believes that the United States is facing a severe economic recession.
The United States is on a path to destruction as attempts to control inflation send the economy into recession, an economist says.
Media speculation that the Fed’s rate hikes will finally be over comes as October data showed retail sales fell for the first time in seven months, particularly in the auto and hobby industries.
Federal Reserve Chairman Jerome Powell has made no secret of his intention to smooth out the U.S. economy at the expense of U.S. jobs, all in an effort to curb inflation fueled by sanctions on energy and food exporter Russia .
Economist Dr Jack Rasmus told Sputnik that this recession is more severe than it appears.
“The numbers they report are not adjusted for inflation,” Rasmus noted. He said: “They are called nominal prices, not real prices. Even the nominal prices are slightly deflated. But in reality, if you adjust for the Consumer Price Index (CPI, inflation), you will find that retail sales It’s a big drop, maybe four to five percent.”
He dismissed claims by President Joe Biden’s administration that “consumers are doing very well and the U.S. economy is going to be in very good shape,” with nominal gross domestic product (GDP) growth at 4.9%.
“This retail sales figure really pokes a hole in the whole argument,” Rasmus stressed.
“The economy and retail sales account for about a quarter of all consumer spending. Consumer spending accounts for two-thirds of the economy,” he said.
The economist said the doom and gloom didn’t end there.
“So one-fifth of the economy is shrinking, and that’s happening in consumption. At the same time, the same is true for housing, but it’s not in the consumer price index or retail sales,” Rasmus said. “Because interest rates are at Staying high, the housing market is going downhill again.” He said: “Small business spending and borrowing are falling sharply because interest rates are too high. Investment in business equipment overall turned negative last month.”
The economist believes that coupled with shrinking manufacturing and real estate sectors, the economy has fallen into recession.
The economist warned that the country is also being driven to ruin by monetary policies pursued by the Fed and its former employee, Treasury Secretary Janet Yellen, which have exacerbated already record-breaking levels of government debt and trade deficits.
Rasmus noted that “fiscal policy is all about taxing and spending.” “We’ve had $15 trillion in massive tax cuts over the years on wealthy people and corporations. We’ve spent $8 trillion on war. So we have a $34 trillion deficit,” he said.
“To cover the deficit, the Fed has to sell bonds,” Rasmus explained. He said: “The Fed’s bond sales will exacerbate the effects of monetary policy and financial policy. But what is driving this policy is the fiscal crisis. You see, the contradiction between the fiscal crisis and the huge deficit is driving the currency crisis, and we are selling too much in the market national debt.”

Sputniknews