If the White House and Congress don’t cut spending soon, the results could be catastrophic

As the White House continues to tout the alleged achievements of the president’s “Bidenomics” agenda, a growing amount of data indicates that a gigantic economic crisis could be right around the corner.
Most disturbingly, one important economic indicator that’s currently flashing hasn’t appeared since the 1930s, during the height of the Great Depression.
If the White House and Congress do not cut inflation-causing government spending soon, the results could be catastrophic.
Historical Context
In 2020, during the height of the coronavirus government lockdowns, President Donald Trump and the Democratic-led Congress spent vast amounts of money to keep the economy, financial system and stock market afloat. Trillions of dollars in additional government spending occurred, all of which was financed with debt and money printing.
The never-before-seen levels of money creation were fueled by policies set by the Federal Reserve, which encouraged Congress to spend more money and kept interest rates extremely low, despite warnings from economists about the threat of future inflation.
When President Biden entered the White House in January 2021, it appeared that the economic crisis caused by the pandemic lockdowns would end soon. A COVID-19 vaccine had been developed, and many states had already started reopening or preparing to reopen their economies.
But rather than return spending to normal levels, Biden and congressional Democrats — with the blessing of the Federal Reserve — opted to keep government expenditures significantly higher than they had been prior to the pandemic.
The decision to continue high levels of government spending, coupled with the Fed’s choice to keep interest rates low and the fallout from the crisis in Ukraine, caused inflation to soar to levels not experienced in four decades. Prices for nearly all consumer items, from eggs and milk to gasoline, skyrocketed.
Not Since the Great Depression
In an effort to fix its mistakes and curb out-of-control inflation, the Fed started dramatically increasing interest rates in 2022, a policy that has continued thus far in 2023.
Meanwhile, the Biden administration and Congress have kept government spending much higher than pre-pandemic levels.
As a result of these policies, the inflation rate has dropped, but not enough to deflate prices. Most consumer goods and services, as well as rent and housing prices, remain much higher than they were before the pandemic started.
Incredibly, however, the money supply — the amount of cash, checkable deposits and bank savings accounts — has substantially decreased. That means even though prices are still going up, the amount of money available is continuing to drop, putting an unprecedented strain on American families.

The latest economic data shows the annual M2 money supply growth rate has been negative for the past three quarters, meaning the amount of money available is shrinking rapidly.
In the past 110 years, the only other time Americans have seen the money supply drop this sharply was in the early 1930s, during the height of the Great Depression.
There is a significant difference this time around, however. In the ’30s, when the money supply annual rate turned negative, prices dropped as well. In our current situation, prices are still going up despite the collapse in the money supply. To the extent we’re seeing it today, this has never occurred before.
Household Savings
The reduced availability of money caused by the Fed’s policies and the Biden administration’s inflationary spending has created a dire situation for American families. Increasingly more people are eating into their savings and going into debt to cover basic living expenses, like food, utilities and housing.
Survey data from the Federal Reserve shows the bottom 80% of income earners, representing the vast majority of Americans, now have less in real household savings than they did prior to the pandemic. And savings for top income earners will likely fall below pre-2020 levels within the next 12 months.
The combination of higher prices and reduced availability of money has caused people to depend on credit cards and other forms of consumer debt at higher numbers than we’ve ever seen. In the spring, Americans’ collective credit card debt topped $1 trillion for the first time in history.
Higher prices, more government spending and debt, and lower levels of household savings — that’s what Bidenomics actually looks like.
Congress and the Biden administration are currently in the midst of a battle over spending. If a deal isn’t completed soon, the government could shut down temporarily. Now is the time to reduce spending and bring fiscal sanity back to Washington, D.C. — before it’s too late.
The U.S. economy is walking on thin ice. If prices and inflation don’t come down soon, something that can only occur if Congress and the White House reduce spending, then the U.S. is soon going to find itself in yet another massive economic crisis.
If that occurs, I hope Americans remember who deserves the blame.