Thirty major central banks are expected to cut rates in the second half of 2024, a year when more than seventy nations will have elections, which often means massive increases in government spending. Additionally, the latest inflation figures show stubbornly persistent consumer price annualized growth.

In the United States, headline PCE inflation in February will likely grow by 0.4%, compared with a 0.3% rise in January, and consensus expects a 2.5% annualized rate, up from 2.4% in January. This is on top of the already 20% accumulated inflation of the past four years. Core inflation will likely show a 0.3% gain, according to Bloomberg Economics, which means an annualized 2.8%, building on top of the price increases of the past years.

The manufacturing and consumer confidence weaknesses of the United States are deeply concerning, particularly considering that all those allegedly infallible Keynesian policies are being applied intensely.

Considering the insanity of deficit spending driven by entitlement programs, the decline in the headline University of Michigan consumer sentiment index in March to 76.5 from 76.9 is even worse than expected. Let us remember that this index was at 101 in 2019 and has not recovered the brief bounce shown by the re-opening effect in March 2021. Consumer confidence is still incredibly low, and a decline in the expectations index fully explains the most recent decline. Persistent inflation, high gas prices, and declining real wages may explain the poor expectations of the average citizen. Furthermore, this poor consumer confidence reading comes after poor control group retail sales last month.

One of the most dangerous things that a government can do is present a glossy picture of the economy at a time when families and small businesses are suffering. Governments are always optimistic, but sending euphoric messages tends to backfire, especially when the situation for the middle class is complicated.

In the United States, the Biden administration’s message of “the strongest economy in decades” is not just an exaggeration; it may anger voters who suffer the burden of negative real wage growth, accumulated inflation, and higher taxes.

In a recent interview with Seth Meyers, President Biden mentioned that the United States has the strongest economy in decades. However, the reality shows that the 2023 GDP growth adjusted for the accumulation of public debt was the worst since 1930. The U.S. national debt hit $32 trillion in June 2023 and surpassed $33 trillion in September. The U.S. national debt now stands above $34 trillion and is rising by $1 trillion every hundred days. The trend is exceedingly worrying because the next trillion comes faster every time, and all this is happening in an alleged recovery with strong employment growth and rising earnings.

Debt matters, and there is a reason U.S. citizens do not see such a positive picture. Negative real wage growth, diminishing purchasing power of salaries and savings, and a much tougher position for families to make ends meet.