Nearly half of Americans struggle to pay their bills as inflation bites. The discussion draws a stark comparison with India's populist politics under Modi. There’s a deep dive into the negative job growth in small businesses and a looming recession despite low unemployment numbers. The reliability of current economic indicators is questioned, while a call for reviving the gold standard as a stabilizing force against federal deficits takes center stage. The podcast concludes with a critical look at the costs of American military interventions and their economic implications.
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Quick takeaways
Nearly 40% of Americans struggle to pay bills due to inflation outpacing wage growth, leading to increased reliance on gig work.
India's populist shift under Modi showcases rising nationalist sentiment and economic strategies that attract global investment and overshadow Western growth.
Deep dives
Financial Distress and Inflation's Impact
Nearly 40% of Americans express constant worries about paying bills, surpassing anxiety levels during the 2008 financial crisis. This growing concern is largely attributed to inflation, which has resulted in a significant gap between nominal wages and inflation-adjusted wages, leaving workers with reduced purchasing power. For example, official inflation rates since the pandemic show a 21% increase, yet fast food prices, a common proxy for inflation, have risen more than twice that amount. Consequently, many individuals are compelled to seek part-time jobs to make ends meet, with a significant portion of the population, especially younger demographics and minorities, increasingly relying on gig work to cope with rising costs.
Surging Populism in Global Politics
Populism is gaining traction across multiple nations, with India serving as a notable example under Prime Minister Narendra Modi’s leadership. His administration, characterized by strong nationalist sentiment and competent governance, enjoys high approval ratings and economic growth that outpaces many Western countries. Modi's focus on improving infrastructure and manufacturing has attracted foreign investment, transforming India into a prime destination for businesses relocating from China. This shift highlights a broader global trend where citizens increasingly favor leaders who promise substantial change in response to dissatisfaction with entrenched political elites.
War Economics and Military Obsolescence
The economic dynamics of warfare have shifted, raising concerns about the sustainability of US military involvement in conflicts abroad, particularly in Ukraine. As costs soar for deploying traditional military assets, drones are emerging as more cost-effective alternatives, leading to questions about the future relevance of conventional forces. The disparity in costs, where nations can inflict significant damage at minimal expense, indicates that the US may be suffering more losses than expected in such engagements. This evolving military landscape suggests a potential reevaluation of America's global military strategy, advocating for a focus on domestic protection rather than maintaining a global policing role.
Weekly Roundup of this week's top Economics stories.
- Nearly half of Americans Can't Pay Their Bills - How India went -- and stayed -- Populist - Small Business Job Growth now Negative - How to Restore the Gold Standard - With 100 to 1 Loss Ratio, Wars are Bleeding America Out
Read the full article “How to Restore the Gold Standard” with charts and all the gory details at www.profstonge.com.