Staff Reports
As the government nears the brink of a debt default, panic is growing in the US. Although some officials are playing it up to gain political advantage, the situation is already dire. Rising inflation and the drop in tax revenues are threatening the country's economy, and the average American is struggling to make ends meet.
Despite the official claims that inflation has started to decrease, most Americans still believe that it is still rising. According to EO Rodney McMullen, the CEO of Kroger, he was surprised by how many executives were openly discussing the company's price increases during conference calls. These types of statements are a clear indication that companies are still raising their prices.
The stock market's gains and pay raises in 2021 caused the Treasury to experience a revenue boost, but this is now gone. Since inflation has been eating away at people's salaries, the economy is in danger of going into recession.
Among the factors that have caused the revenue decline is the lack of gains from last year's stock market. Although inflation is the main issue for most Americans, it is also the reason why the tax brackets are adjusted. As a result, the sudden increase in wages and incomes caused by higher prices led to a one-time tax increase in 2021. This will gradually moderate over time, which further restricts the purchasing power of the American consumer.
The consumer sentiment index has dropped to its lowest level in six months. Americans are becoming more concerned about the potential impact of a recession on their local banks and the state of the economy. If they start to save more, this could cause the US economy to shrink. The nation's economy depends on spending by consumers, and if they start to pull back, it could cause the economy to contract.
The White House and Congress need to take this situation seriously, as a recession is possible. Since the economy has been going through a tough three years, Americans are still looking for signs of relief. The government needs to take immediate action to prepare for a potential economic crisis.
Source: Conservative Institute
