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If 2023 Brings A US Recession, Don’t Expect Congress To Help
I thought this was obvious, but apparently not: The prospects of fiscal measures to bolster the US economy in the event of a 2023 downturn are pretty dim.
At least one notable investor suggested over the weekend that both monetary and fiscal policy would swing into action should the world's largest economy fall into recession in the back half of this year. That's probably accurate on the monetary policy side of things, particularly if inflation is materially lower by then. But as that investor
Only a very sharp and/or extended downturn would get this new congress to move and only if it hurt the red areas badly. A white collar or a more moderate recession probably gets no fiscal response. The war in Ukraine will likely add a defense weapon restocking in the next few years though. And the new infrastructure law will as well.
Subpar growth with inflation low enough to give the Fed plausible deniability for easing and monetary policy as the “only game in town” due to fiscal inaction, is familiar territory. That sort of conjuncture bodes well for markets, but poorly for Main Street.
Let it be, oh God, let it be… I’m tired of those freaks telling us we’re back to the 70s or the 30s or whatever. We had a pandemic, we shut down the economy, we overstimulated when we reopened. Mistakes were made but overall I’d give our macro overlords at the Fed and in the government a B+ to A-.
I suspect that Mitch is not the only Republican who realizes that the party is slowly receding in popularity with the electorate. Trump belongs in the rearview mirror, no legislative initiatives forthcoming to advance the country, too many idiots in the caucus and the usual hypocritic agenda with anything the Democrats put forth. There may be enough Republicans who are sick and tired of their parties display of vitriol and inaction to start voting for their constituents good if they hope to be elected in 2024. (Hope springs eternal)