The travails of the US economy roll on into 2023

Asia Times ^

[FarCenter]

In December 2021, most Americans were looking forward to a quiet and prosperous 2022. Covid-19 cases were down, the stock market was up and jobs were abundant. What could go wrong?

Many things did. Geopolitical trauma came first. After a chaotic US military withdrawal from Afghanistan in August 2021, it seemed that US involvement in foreign wars was drawing to an end. Yet on February 24, 2022, Russian President Vladimir Putin invaded Ukraine. The ground battle then morphed into a proxy war between the North Atlantic Treaty Organization and Russia.

...

But battlefield success was coupled with global economic distress, as energy and food prices soared. The proximate causes were Western sanctions on Russian oil and Russian sanctions on gas exports to Europe. In the United States, elevated oil and gas prices reinforced inflationary forces unleashed by monetary expansion and fiscal stimulus.

Two new flashpoints also emerged in the US cold war against China in 2022. The first was the battle for technology supremacy. The US public, inflamed by leaders in both political parties and by Chinese President Xi Jinping’s assertive actions, became convinced that China was not merely a competitor, but an adversary out to destroy US jobs and push US military forces out of Asia.

...

Inflation that was initially considered transitory seemingly became entrenched. During 2021, the US Federal Reserve ballooned its balance sheet (and the money supply). It went from $4 trillion in December 2019 to nearly $9 trillion in December 2021. This was coupled with fiscal stimulus that distributed more than $2 trillion of outlays in late 2020 and early 2021.

This joint monetary and fiscal expansion coincided with an economy that offered almost two job vacancies for every unemployed worker.

The policy extravaganza came home to roost this year as inflation soared to nearly 8%. The Federal Reserve launched an aggressive monetary tightening campaign that raised the policy rate from near zero in January to a target of 4.25-4.5% in December.

[Worldtraveler once upon a time]

--- "The travails of the US economy roll on into 2023"

Democrats happened. RINOs assisted. The Biden administration as Obama's third term happened. Green happened. Mandates and gaslighting happened. Travails enough.

[EEGator]

2023 will make 2022 look like the good old days.

Too many situations aligning at once.

[laplata]

You’re right. I’m not looking forward to 2023 .... or 2024 .....or .........