Even the "experts" are finally admitting we're in a recession, and throwing out the term "hard landing" (severe recession) is happening constantly these days. (hint-we have been since the start of the year, with Q1 and Q2 both showing negative GDP growth). We have the highest inflation in over 4 decades, reminiscent of the Carter years. Yet even after it was obvious we had a major recession problem (over a year ago) this administration and Congress flooded the financial markets with upwards of 3 trillion dollars in new, arbitrary spending ("infrastructure bill", "inflation reduction act" and "welfare for student loan deadbeats"). I think this is a record amount of new spending in just one year outside of a major war or emergency situation (such as a world wide pandemic). Inflation guts people's spending power, forcing them to slash discretionary spending simply to buy necessities.

At the same time, we have interest rates climbing rapidly. This impacts many segments of the market, most particularly housing. Housing sales have dropped rapidly in the last few months. More important, new home construction has flipped, from record demand to a had slump. Killing the new home industry impacts over 10% of the economy, primarily in the construction and related fields-the timber/lumber industry, concrete, interior finishes, cabinet makers, etc. All jobs that typically pay quite well, far better than your typical service industry jobs. Equally important, putting these people out of work takes away their spending power across the economy. Related issues-we have had a housing shortage for a long time (literally 1 1/2-2 decades). We are building new homes slower than demand is increasing, to the housing shortage, inflation in housing prices due to lack of supply and skyrocketing rents. We can only expect this to get worse as construction drops. The situation is only compounded by years of "eviction moratoriums" where property owners were forced to provide housing to deadbeats that refused to pay rent. Those property owners are either getting out of the rental market, raising rents to recoup some of what they lost, and increasing demands for up-front rent, some demanding a year in advance. All smacking renters in the face, and increasing the number of homeless that simply can't afford housing.

Further, the stock market has tanked hard. Many retires have their entire life's savings (and futures) tied up in the market, and have watched their life's savings go up in smoke, many down 20-30% in just the last few months. All of this is slashing spending ability, and shutting down major spending plans. That impact is felt across the entire economy, with reduced spending on home construction/remodeling, vehicle purchases, service (not eating out and cancelling vacation plans). All issues with long-term impacts.

The other issue that's related is our criminal justice system and related skyrocketing crime rates, especially in our major cities. In many places people see urban areas as too dangerous to go out in. Businesses are closing and leaving downtown areas (Seattle, Portland, NYC and others). We are paying ever increasing insurance rates (and prices) to cover losses due to theft and vandalism. The one positive part of the economy is gun sales and manufacturing, as people rush to secure means of protecting themselves. Oh and home security systems.

So....how bad is it going to get, and for how long? Inflation has been rocketing for well over a year, with no sign of stopping (CPI was up again last month so if anything it's increasing). Fed plan on continuing rate hikes for the next several months. The broader financial markets are seeing the results of these changes. Pull out your crystal balls and speculate. When will the economy finally bottom and start to turn around? How high will mortgage interest rates go? How high will unemployment get? How much will homelessness climb? Will we ever be able to get back to the economy of the Trump years (pre-pandemic) with low unemployment, strong growth and 2% inflation?

I'm hoping things turn quickly, but frankly am not very hopeful. It seems like everything happening and being done by our government is aimed at destroying our economy and making people suffer for as long as possible. What is your guess?