by Brittany Raymer
Former Digital Writer & Editor
On Wednesday, June 15, the Federal Reserve raised the interest rate by .75%, making it the biggest single hike since 1994. The decision was made in response to skyrocketing inflation, which currently sits at an annual rate of 8.6%, and a stagnant economy, often called stagflation. As a result, there was a huge dip in the market, in both the S&P 500 and Dow Jones Industrial Average, indicating that the country’s economy is slowing down and entering bear market territory.
Most experts agree it’s no longer a matter of if but when there will be a recession.
However, it doesn’t seem like the Biden administration has any desire to reverse course or address the country’s faltering economic situation.
Though the Fed’s announcement of the largest interest rate hike in almost three decades was noted, the White House continues to argue that “everything is fine,” despite all of the troubling economic numbers.
In a tweet following the announcement, President Joe Biden wrote: When I took office, the economy had stalled and COVID was out of control. Since then, we’ve achieved the most robust recovery in modern history.
“Because of that foundation, we’re better positioned to overcome global inflation and reach a new chapter of stable and steady growth.”
But it doesn’t really feel that way to most Americans, who cringe every time they pull into a gas station and are paying upwards of $100 or more to fill up their tank.
As gas prices continue to spiral out of control, President Biden has greenlit another sale of the strategic petroleum reserve, which is usually saved to offset potential wartime disruptions, in order to starve off criticism of his failed policies.
He also sent a letter to gas companies around the country, threatening executive action against them if they don’t start increasing refinery output. But, as a report in CNBC points out, “refiners can’t just ramp up output, with utilization rates already above 90%.”
At this point, it appears that Biden and his team are doubling down on failing policies and pushing unions as the future of American business culture.
So how did this happen?
Donna King, editor-in-chief of the Carolina Journal, explains that there are five key policies that have contributed to this economic mess:
“Beyond what action the Federal Reserve took on Wednesday, recession can also be a self-fulfilling prophecy. If consumers see high prices and diminishing value in their pay, they will act accordingly, cutting expenses and investment,” King wrote.
Addressing some of these issues with a change in policy would help reverse course on some of this economic mess, but it still might not stave off a recession.
Michael Yoshikami of Destination Wealth Management told CNBC that a shallow recession is a “virtual certainty,” but policies enacted today may determine whether it’s a short-lived phenomenon or something more detrimental.
In the state of North Carolina, Paige Terryberry, senior analyst for fiscal policy at the John Locke Institute, argues that the Governor Roy Cooper and legislators can best protect the citizens of the Tar Heel State by curbing spending and refusing the suggested Medicaid expansion. Both these measures would help North Carolinians keep money in their bank account and avoid burdensome and costly government policies.
Rough times are ahead, but good state and federal policies will determine how difficult things will get.
Watch this video from Locke CEO Amy Cooke on how the Biden administration is causing more harm than good.