America’s economy shrunk by 1.4% during the first three months of 2022, a result of failed progressive policies that, without policy course corrections, could lead to recession.
New Bureau of Economic Analysis data issued today showing backsliding GDP come as no surprise, given recent binge government spending and easy monetary policy fueling record, staggering inflation now hurting American families. The contraction also stems from President Biden’s failed energy policies that emboldened and encouraged Vladimir Putin’s invasion of Ukraine, contributing to spiking energy costs.
How to halt this shrinking economy? First, policymakers must rein in federal spending that is treating the U.S. dollar as toy monopoly money—with no real thought about its valuation and the impact of continued spending. In February, America hit the dubious milestone of $30 trillion in debt, including trillions of dollars owed to foreign nations like China and Japan. Recent media reports give glimmers of some Democrats hoping to revive the incorrectly-named “Build Back Better” bill, but smart lawmakers, like Sen. Joe Manchin (so far), will continue to hold the line against more new spending that will fuel inflation.
Senators should also continue to block Federal Reserve nominees who are completely unqualified and even hostile toward the Fed’s mission of keeping prices low through responsible monetary policy. Interest rates have been held at or near zero for far too long, driving spending and adding to an overheated economy. Senate Republicans on Tuesday rightfully blocked the nomination of Lisa Cook, an economist from Michigan State University, to the Fed’s board of governors. Independent Women’s Voice opposes Cook’s nomination (which is currently still on hold) because rather than keeping focused on the Fed’s narrow purpose, she would pursue a divisive, unproven racial justice agenda that prioritizes equality of outcomes rather than equal opportunity. Such racialized policies harm the most vulnerable, however well-intentioned they may be. They also divert from the main mission of the Fed, to keep unemployment low and inflation in check.
IWV also opposed the failed nomination of Sarah Bloom Raskin, who advocated for discriminating against the fossil fuel industry to drive it into extinction in pursuit of a climate-change crusade—just as energy prices are skyrocketing.
Deutsche Bank this week warned that “a deep recession will be needed” to control spiraling inflation, now at 40-year highs—a staggering 8.5% in the last year. Through spending cuts, smart regulation reform, unleashing energy production, and providing tax relief, policymakers can prevent this dismal prophecy from coming to pass.