November 14, 2023

The 2024 presidential election is a year away. The political landscape of America in October of 2024 will be far different than it is today. The current polling, which focuses on which candidate for president is winning and the attendant punditry, is meaningless. Over the next twelve months there will be a significant increase in voter dissatisfaction due to unabated crime and illegal immigration as well as seismic shifts in the economy and foreign affairs which will dramatically affect the fortunes of both parties and their candidates.

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A September 2023 poll revealed that just 28% of Americans believe the U.S. political system is working extremely or somewhat well. Additionally, 65% of respondents indicated that they are dissatisfied with the candidates running for president as another recent poll exposed that just 33% of American electorate has a favorable view of Joe Biden and only 29% have a favorable view of Donald Trump.

When combined with 76% of Americans believing the country is headed in the wrong direction, the darkly negative outlook of the citizenry will not improve over the next twelve months as there is virtually nothing indicating a sea change in the nation’s fortunes or politics. In fact, an unjaundiced view of the immediate future reveals ever-growing dark clouds on the horizon.

The economy is currently being propped up by unprecedented government expenditures combined with modest growth in consumer spending as Americans are paying significantly more for virtually everything. However, the current level of consumer spending cannot be sustained and will soon begin to significantly decline.

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This decline is inevitable due to total household debt now reaching an unheard-of $17.28 Trillion  (equivalent to the annual gross domestic product of China) while real incomes continue to rapidly deteriorate due to intractable inflation.

Many have been forced to turn to borrowing, spending their savings, drawing down their retirement accounts and credit card debt to pay their bills. As a result, bankruptcies and loan and credit card delinquencies are skyrocketing, while the wealth of Americans is being rapidly depleted.

The Biden Administration and its allies in Congress are determined to continue propping up the economy through massive government spending. However, due to this out-of-control fiscal policy, the government is having an increasingly difficult time convincing investors to buy long-term U.S. Treasury bonds without committing to significantly higher interest rates with each new auction.

The estimated annualized interest payments on U.S. government debt currently exceeds $1 Trillion, which represents 45.5% of all income tax revenue collected annually by the federal government and a doubling of interest expenses over the past 19 months alone.

While exorbitant government spending, borrowing, and de facto money printing continues there is little chance of inflation receding. The consumer, unlike previous economic recoveries, will not be at the forefront of triggering economic growth. Thus, the reality of a severe long-term economic downturn becomes more inevitable by the month.

The general consensus of many economists is that there is at a 60-65% probability of a recession before September of 2024. However, the ongoing massive drop in shipping volume, record bankruptcies, and unprecedented layoffs in the global and domestic supply chain portends a much higher probability of a significant recession in 2024.