How do you create a recession?

Overheating the economy with a massive increase in government spending, disguising employment with public sector jobs, and soaring federal debt. The foundation of Neokeynesian economics always rests on the idea that an economy must prioritize government spending, leading to full blown socialism. When the economy is growing, government spending rises because, allegedly, it is time to borrow and grow. When the economy overheats and enters the inevitable recession, government spending must rise again because it needs to support growth. See? The size of government in the economy increases both during and after a recession. Taxes constantly rise, but debt rises faster. Upside-down economics.

The Biden-Harris administration has followed exactly the policies of the Greek, Spanish, and French socialists into an election year prior to their countries’ crises. The strategy involves inflating the GDP through excessive government spending, creating an uncontrollable deficit during a period of economic recovery, and masking employment through government jobs financed by increased debt. In the process, the printing of money results in the highest inflation in decades.

The insane neo-Keynesian policies implemented by the Biden-Harris administration have created persistent inflation and record levels of debt with two objectives: to bloat Gross Domestic Product and jobs with public spending and government jobs.

The United States’ insane inflation is solely due to out-of-control spending and currency printing. Corporations, wars, or supply chains cannot cause aggregate prices to rise, nor can they consolidate the increase even at a slower pace. Although this can have an impact on individual prices, the only factor that causes aggregate prices to rise year after year is the decline in the value of the US dollar that the government issues.

The United States 10-year government bond yield reached a low of 3.6% in September but has rapidly creeped up to 4.2%, erasing all the rate cut impact. The primary cause is the out-of-control public spending and the lack of confidence among bond investors in the government’s ability to manage its public finances. Therefore, it is logical that investors fear an inflation bounce.

The United States’ government is obsessed with doping GDP with government spending and bloating job figures with public sector hires. This is the road to ruin or stagflation.

This week, the IMF stated that “our forecasts point to an unforgiving combination of low growth and high debt, a difficult future,” emphasizing that “governments must work to reduce debt and rebuild buffers for the next shock, which will surely come, and maybe sooner than we expect.”

This advice comes with a warning. At the current rate of spending, the US debt to GDP will reach 198% by 2050 even without expecting a recession. The G-7 public debt to GDP is expected to soar to 188%; the global figure would rise to 122%. Only one country will reduce debt. The IMF expects Germany to reduce its debt from 63.5% to 42%. In the case of Japan, the IMF expects public debt to reach a staggering 329%. The IMF’s Fiscal Monitor informs that public debt levels will reach $100 trillion in 2024, driven by China and the US.