12 Reasons to Believe the U.S. Economy Is Facing an Unprecedented Crisis

#1 Ballooning National Debt and Fiscal Deficits The U.S. national debt has reached astronomical levels, matching the debt levels at the end of World War II. The Congressional Budget Office (CBO) projects that the federal deficit will continue to grow, reaching 5.8% of GDP. This is a ticking time bomb that could explode with the next recession or crisis, making it nearly impossible for the U.S. to borrow without drastic measures like tax increases or severe spending cuts. #2 The Escalating Commercial Real Estate Crisis According to the New York Times, major Wall Street banks are offloading their commercial real estate loan portfolios to cut losses, signaling deepening distress in the commercial real estate market. High interest rates and low occupancy rates, the fallout from the pandemic, are wreaking havoc on this sector. #3 Banks Shuttering Branches Nationwide In a troubling trend, U.S. banks have closed more than 400 branches this year. The first three weeks of June alone saw 51 closures. Banks are moving services online and eliminating costly brick-and-mortar locations, further isolating consumers who rely on in-person banking. #4 Mass Layoffs Across Major Companies Large companies are shedding workers coast to coast. Recently, 500 Texas truckers lost their jobs when a large logistics company abruptly shut down. US Logistics Solutions, recently acquired by private equity, laid off 2,000 workers without warning, leaving them jobless and unpaid. #5 Persistent Negative Dallas Fed Services Index For 25 consecutive months, the Dallas Fed Services Index has remained in negative territory. Respondents’ comments highlight the pervasive blame and dissatisfaction, pointing to a deteriorating economic environment. #6 The Intensifying “Restaurant Apocalypse” Hooters has shuttered nearly 40 “underperforming” locations, adding to the growing list of eateries succumbing to inflation and shifting consumer habits. This abrupt closure underscores the harsh economic realities facing the restaurant industry. #7 Retail Chains Going Bankrupt at Alarming Rates Retailers are collapsing under economic pressure. Two large Northeast retailers, Bob’s Stores and Eastern Mountain Sports, recently filed for bankruptcy. This trend isn't isolated. Fast food chains and restaurants in California, such as Red Lobster, Mod Pizza, and TGI Fridays, are also facing financial ruin, leading to numerous closures across the state. This wave of bankruptcies is a signal that the economic storm is far from over, impacting countless workers and communities. #8 Plummeting Consumer Confidence U.S. consumer confidence slipped further in June, with the Conference Board’s index dropping to 100.4 from 101.3 in May. Americans are increasingly wary about the future, a sentiment that could further depress economic activity. #9 Downward Revisions to Consumer Confidence The initial consumer confidence reading has been revised downward in 7 of the last 8 months, showing persistent pessimism. This trend indicates consumers are losing faith in the economy, leading to reduced spending and further economic slowdown. This cycle complicates recovery, impacting businesses and increasing the risk of layoffs, further deepening the economic challenges. #10 Record Unaffordable Housing Housing in the U.S. is more unaffordable than ever. Home prices are 47% higher than in early 2020, with the median sale price now five times the median household income, according to Harvard’s Joint Center for Housing Studies. #11 Surging Homelessness in Major Cities In Chicago, the homeless population surged significantly, tripling in size from January 2023 to January 2024. Other major cities, such as Los Angeles and San Francisco, are encountering comparable increases in homelessness. Those at the lower rungs of the economic ladder are disproportionately affected by this crisis, bearing the brunt of the hardships. Homelessness, poverty, hunger, and theft are all on the rise. Community service providers in these cities are overwhelmed and lack the resources to meet the escalating needs. #12 The Rise of Delinquencies Echoes 2008 Credit card delinquencies have surged to their highest level in over a decade, reminiscent of the 2008 crisis. Auto delinquencies are also skyrocketing. This trend could trigger a catastrophic market collapse, as consumer spending—constituting 70% of U.S. economic activity—takes a severe hit. A Grim Prognosis The current economic conditions are just the beginning of a harsher reality. As the economy continues to deteriorate, the situation will become increasingly dire. Despite this, President Joe Biden and his administration insist everything is fine, even claiming the economy is "booming." But the stark, cold numbers tell a different story; one that starkly contradicts the endless stream of propaganda we are fed daily.

12 Reasons to Believe the U.S. Economy Is Facing an Unprecedented Crisis

Mr. Anderson Jun 26

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