Wealthion - Be Financially Resilient Why Rate Cuts Won’t Work: EJ Antoni on The Fed & U.S. Fiscal Crisis
Sep 17, 2024
E.J. Antoni, an economist and research fellow at the Heritage Foundation, dives deep into the troubling state of the U.S. economy. He argues that the Fed's interest rate cuts won’t remedy the real issues of rampant government borrowing and record deficits. Discussions reveal a fierce conflict between the Fed and Treasury, exacerbating inflation and unemployment. Antoni highlights alarming trends in household debt, a changing job market, and the necessity for urgent fiscal restraint to avert a financial crisis.
AI Snips
Chapters
Transcript
Episode notes
Economic Reality vs. Data
- Official economic data often disconnect from the average American's experience due to how statistics are calculated.
- Government spending on welfare is counted as consumer spending, bloating the numbers and masking the financial struggles of many.
Understanding Economic Data
- The disconnect between economic data and reality is partly due to journalists lacking economic training, focusing on top-line information.
- Economists have also become complacent, failing to delve into the details of reports, further obscuring the true situation.
Impact of Rate Cuts
- Rate cuts primarily benefit Wall Street, reinflating asset bubbles instead of helping the average American.
- High credit card interest rates, around 30%, are a major burden, exacerbated by a generation accustomed to artificially low rates.