America


Why Is the Stock Market So High — Is a Tsunami Coming?


The economic growth touted by Biden hides an explosive surge in government spending.


T BY MATTHEW LYSIAK


he signs of an economic recovery appear unmistak- able: Interest rates are fall- ing, consumer spending is


strong, and the stock market has been flirting with record highs. So why are so many experts pre-


dicting economic calamity? With poll numbers dipping into


historic lows, the Biden administra- tion has been on the offensive in attempting to spin recent data to flip what has long been perceived as one of the president’s biggest politi- cal vulnerabilities — the economy — into an asset as campaign season goes into overdrive. In a Jan. 24 briefing, Treasury Secretary Janet Yellen touted the administration’s optimistic outlook heading into the next election, tell- ing reporters: “The U.S. economy is on a very desirable path . . . and my expectation is, in spite of the fact that there are always risks, the economy is doing very, very well.” The White House has the statisti- cal ammunition to bolster its case


16 NEWSMAX | MARCH 2024


that this economic recovery is real. The S&P 500, a widely followed


gauge of the stock market, reached a new all-time high on Jan. 19. That same month, the Bureau


of Economic Analysis reported that the nation’s economy had grown by 2.5% over the course of the last year, including a robust annual rate of 3.3% in the most recent quarter. Further, this substantial growth


in the nation’s economy has been attributed to an increase in con- sumer spending on both goods and services. The New York Times’ Paul Krug-


man concluded that Biden “couldn’t have asked for better numbers.” However, despite all the positive indicators being recited by the Biden administration and his supporters, a deeper dive into the state of the nation’s finances reveal a series of potentially explosive threats perco- lating just beneath the glossy head- line-garnering numbers. Economist E.J. Antoni, a research


fellow at The Heritage Foundation, told Newsmax that the positive indi-


cators touted by Joe Biden as proof that the nation has turned the fiscal corner are misleading, akin to eco- nomic fool’s gold. One example of economic sleight


of hand, said Antoni, can be seen in the data showing an increase in gov- ernment spending, which on paper gives the numerical appearance of growth, while in reality hinders the economy as a whole. As evidence, he points to the


last six fiscal quarters, which have shown government spending to be growing faster than that of consum- er, creating a draining effect on the private sector. “It may appear the economy is


growing on paper, but what is actu- ally growing is government spend- ing,” said Antoni. The rest of the economy that has


to support the public bloat will inev- itably slow down, he adds. Data on job growth is another


false indicator where government figures give the appearance of an upward trajectory, as the nation- al average unemployment rate remaining unchanged at 3.7% for the month of December, with the reported addition of 216,000 jobs. However, the underlying details


NOKWAN007/SHUTTERSTOCK


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