More Troubling Economic News at Home and Abroad | Eastern North Carolina Now | Be prepared for more market shocks, tax increases, inflation and pain at the pump

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    Publisher's Note: This post appears here courtesy of the John Locke Foundation. The author of this post is Brittany Raymer.

    Americans should prepare for more dire economic news at home and abroad as Russia restricts its natural gas supply to Germany, the Fed raises the interest rate again, Senator Joe Manchin (D-W.Va.) agrees to more government spending and the country officially enters another recession.

    Just don't tell the Biden administration, which seems focused on sticking its head in the sand by redefining recession, ignoring inflation, spending more taxpayer money on green energy, and ignoring domestic and international crises.

    This week, Russia cited maintenance work as the reason for restricting its Nord Stream 1 pipeline, which supplies natural gas to much of Western Europe, to a fifth of its capacity. In reality, it's retaliation for the EU and West's support for Ukraine.

    This "maintenance issue" came just as the EU was meeting to discuss cutting 15% of gas use in the future in preparation for winter and artificial shortages brought on by Russia's passive aggressive actions.

    Already, the price of oil is already up 12% in Europe and tightening of the market will likely impact Americans at the pump at some point, just as the prices are beginning to come down. If Russia continues to restrict supply randomly, European countries will increasingly be competing against the United States and other countries on the international markets.

    This comes as the country officially enters recession territory, with a second consecutive quarter of negative GDP growth.

    The housing market has also cooled and mortgage rates have fallen, after previously being on a high, the Fed has once again raised the interest rate by 0.75%, and there are still a lot of job openings and businesses unable to operate at pre-pandemic capacities due to worker shortages.

    And it's about to get worse.

    In a shock decision, Sen. Manchin recently agreed to support the "Inflation Reduction Act of 2022," a deal that includes $370 billion in energy and climate spending, $300 billion for deficit reduction, three years of subsidies for Affordable Care Act premiums, prescription drug reform and significant tax changes. Despite previously stating that he will not support any measure that would raise taxes during a recession, this bill will raise taxes.

    That's not good news, and many believe that the additional spending and tax increases, mostly on large companies, will inevitably lead to more inflation and price increases as businesses pass on those costs to consumers.

    But the Biden administration appears immune or dismissive to all of these troubling economic indicators, and instead continues to tout their economy as one of the greatest in American history.

    "Coming off of last year's historic economic growth - and regaining all the private sector jobs lost during the pandemic crisis - it's no surprise that the economy is slowing down as the Federal Reserve acts to bring down inflation," Biden said.

    "But even as we face historic global challenges, we are on the right path and we will come through this transition stronger and more secure," the president added. "Our job market remains historically strong, with unemployment at 3.6% and more than 1 million jobs created in the second quarter alone. Consumer spending is continuing to grow. Earlier this week, I met with the Chairman of SK Group from Korea, just one of the companies investing more than $200 billion in American manufacturing since I took office, powering a historic recovery in American manufacturing."

    It's difficult to believe that the United States is entering another recession, just 14 years after the Great Recession of 2007 to 2009, but what's perhaps even more troubling is that the administration seems to have no plan, except to spend and tax more.
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