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Last week, president Joe Biden announced $1 billion in federal funding for 21 regional partnerships across the U.S., focused on advanced manufacturing, biotech, clean energy, and other sectors.
The money was part of the $1.9-trillion American Rescue Plan (ARP) that passed Congress all the way back in March 2021.
In 2020, the U.S. Federal Reserve created more than $6 trillion in stimulus money that presidents Trump and then Biden flooded into the economy, separate from the ARP’s $1.9 trillion.
As a result, retail sales and job numbers soared.
However, those almost $8 trillion over two years has created an artificial spike in demand that has driven inflation at speeds not seen in decades and spurred the U.S. Federal Reserve to ponder raising interest rates to a level that will ignite a recession, analyst Tyler Durden argues in a ZeroHedge essay last week.
Even as it weakens, the U.S. economy is still coasting on COVID cash, Durden says.
On 2 September, the Biden administration asked Congress for another $22.4 billion to meet “ongoing needs” related to coping with the virus.
As Durden sees it, a key problem with the stimulus trillions is that it has done little to create manufacturing jobs; most employment growth has been in the services and non-manufacturing sectors.
“Without production to match the money supply and consumer demand, the stimulus money creates a massive financial bubble and fragile illusion in the jobs market,” he wrote.
“This is why we have a stagflationary crisis today and why there will be a reckoning in unemployment in the near future,” he added.
“COVID stimulus measures created a fever dream of false prosperity in retail sales and jobs and soon the country will have to wake up.”
TREND FORECAST: As we have long forecast, the U.S. and global economies were artificially propped up with fake money and negative and zero interest rate policy to fight the COVID War… which has spiked inflation. And despite the monetary methadone pumped into the system, billions of lives and livelihoods have been destroyed by the draconian COVID War battles launched by politicians. And, contrary to their bullshit line when the COVID War was launched that “It’ll come back,” no it won’t. A bad situation has, and will get worse.