Inflation’s Long Shadow on Welfare States

Economic cycles are shifting as traditional investments like tech stocks face declining attractiveness in the wake of potential dollar depreciation and rate cuts by the Fed. The expectation of these cuts appears overblown and may come with minimal impact. Concurrently, secular inflation trends are evident, as Western welfare states struggle under growing budget deficits amidst aging populations and rising medical costs. Attempts to stabilize these systems through immigration have not yielded the necessary productivity improvements, further exacerbating fiscal pressures and societal tensions. The challenges faced highlight the complexities of sustaining welfare programs in a changing global economy.