At this point it is just a waiting game for the National Bureau of Economic Research to declare that we have been in recession. Of course they work from past data; we all do. But the data will show what has been true for months. Investment is falling. Unemployment is rising. The trends are consistent with every single recession on record. Have a look for yourself.
All that is bad enough. Maybe your job is secure. Maybe you are out of the stock market. Maybe you aren’t waiting for a return on some real estate investment. The problem that hits everyone is inflation, which is roaring out of control in all the sectors we care about. We have entered the double digits, and if producer prices forecast consumer prices, we are in for tougher times ahead.
So what does Washington do? In an act of incredible stupidity, Congress has passed an extension of unemployment benefits. The old rule remains true: if you subsidize something, you get more of it. So this will give us more unemployment. No question about that. It will thereby worsen and prolong the problem. FULL ARTICLE