us economy

The World Bank estimates that global growth will hit a firm 5.6% this year, and although it may not feel like it considering the circumstances, the U.S has been a top leader in global economic recovery.

Unfortunately, there are underlying issues that could prove to be significant enough to not only knock us off our path to growth but possibly even send us in the opposite direction.

For one, our federal budget deficit has been at extreme levels for a disturbing amount of years, if not decades, with no real solutions in sight.

And it doesn’t seem to be improving anytime soon.

In fact, the last time our federal budget deficit was performing this poorly was during World War II.

Traditionally, we could expect to see deficits ranging from $500 billion to $1 trillion in any fiscal year.

But as we know, the past (primarily the past two years), has been anything but traditional.

For instance, in 2020, our deficit soared to terrifying heights reaching $3.13 trillion, nearly 200% higher than what would be considered a bad year.

As of July 2021, we were already sitting at a federal budget deficit of $2.54 trillion for the year.

Another heavy-weighing factor that shouldn’t be taken lightly is the eviction moratorium or deferred rental payments that have been running for nearly a year now with multiple ongoing extensions.

While the moratorium provides relief for renters, it simultaneously places strain on the owners.

According to a Pew Research Center analysis of Census Bureau data, this could create a massive negative after effect seeing that 72% of all single-unit rental properties are owned by individual owners, not large investment companies and firms.

Should the homeowners begin to experience financial difficulties themselves, a domino effect of defaults stretching across our nation could lead us into a time with elements similar to the 2008 financial crisis.

Out of the many bleak possibilities we are facing, one thing is for sure, the next negative news we receive or event we experience, regardless of how small, may be the breaking point for the economy.

Regaining traction, at the very least to become somewhat stable as an economy, is the next most significant milestone that we must achieve.

Inflation rates are sitting around 5.3%, the highest it’s been in over a decade- how much higher will it go?

How long will it be until our economy gets better?

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