Bidenomics: Cashless, Homeless, and Jobless


Written by Daniel Horowitz

The president recently defined “Bidenomics” as building the economy “from the middle out and bottom up, not the top down.” In fact, Bidenomics is really the economy’s equivalent to “long COVID,” whereby that same middle class suffers permanent degradation of quality of life and standard of living while being caught in the permanent and degenerative cycle of government debt, inflation, and market manipulation.

Despite the rosy economic projections from the White House, incontrovertible data shows that because of the COVID lockdown policies he and his predecessor supported and the new policies they enacted to “fix” the market distortions created by the endless debt-driven inflation, a young family now has to live at the top of the economic pyramid to even afford basic living. We are suffering a vicious cycle of “long economic COVID,” in which supply of vital goods is scarce, costs are high, credit is tight, cash and houses are gone – and that is after tapping out trillions of printed money and hundreds of millions of barrels of oil from the Strategic Petroleum Reserve. With the government stimulus tricks in the arsenal depleted, the natural consequences will now play out.

Housing more unaffordable than ever

Our government artificially inflated the housing market by keeping interest rates unnaturally low for so long and purchasing mortgage securities since 2008. Then, in response to COVID, the Federal Reserve lowered rates to zero and bought $2.6 trillion in mortgage-backed securities. Together with choking off supply of new construction during the lockdowns and then incurring the effects of the residual increased cost of building materials because of the debt-fueled inflation, it created an insane housing bubble – fueled both on the supply and demand sides.

Consequently, housing prices are so high relative to income that mortgages have now become unaffordable if they are not tethered to historically low interest rates. So now a 7 percent mortgage rate on today’s housing price is more unaffordable than at any time in history.

A new report from the real estate brokerage Redfin shows that homes are turning over at the slowest pace in over a decade. As such, prospective homebuyers now have 28 percent fewer homes to choose from than they did before the pandemic. That rate is well over 30 percent lower in suburban neighborhoods, where there is an even greater reluctance to sell. Overall, just 1 percent of homes changed hands so far this year, the lowest rate in a very long time.

The fact that our government fueled a housing bubble and then rapidly hiked interest rates and created a mortgage cliff on record high home prices has induced an unprecedented housing shortage. Typically, mortgage rates rise gradually and work against home prices. The higher the mortgage rate, the greater the downward pressure on home prices. But we are living in Bidenomics, not a natural free market.

With a mortgage rate cliff created over just one year of precipitous Fed hikes (all to service the public debt), most homeowners looking to make a lateral move are sitting on their homes and refusing to move because they don’t want to be saddled with a doubled mortgage rate. This, along with the supply-side issues, has created a housing availability shortage, which ensures that the record high prices are not coming down enough in most parts of the country.

To illustrate the point about housing affordability, in 1981, the cost of a single-family home was about $66K. Adjusted for inflation, that should come in around $232K today. Instead, the average price of a median single-family home is hovering around $437,000. Therefore, you now need to make at least $125,000 per year to afford half of the homes for sale in the U.S. in an average-cost city, and that is before factoring in the strain of inflation on the rest of your budget. Compared to the average income, the cost of a home is now more expensive than ever, even compared to the 2008 bubble.

Thus, even as the Fed is slated to raise interest rates again this week, it will not push down the price of houses enough, because it is merely making the limited inventory more unaffordable for those who need to finance a home. Mortgage demand is at the lowest level since 1995.

So we all know that our government doesn’t want you to have kids and start a family. This vicious cycle of debt, money printing, inflation, and the second- and third-degree consequences of Federal Reserve policies in response, is making it so that nobody without an unusually high income can afford a house as a young couple. This has, in turn, placed tremendous pressure on rent prices, which have now surged past $2,000 and a lot higher in popular metro areas.

Out of cash, out of luck

The only thing staving off a full economic crash until now was consumer spending. Flush with cash from printed money that many households left unspent during the lockdown, consumer spending fueled a relatively high level of economic activity in recent months relative to the crushing cost of vital goods. This has kept the official GDP and jobs numbers high enough for the Biden administration to brag about, even though much of that economic growth was built on the largest corporations being made richer by the disgusting COVID policies. However, that is coming to an end. The money is spent, and now consumers are facing all the consequences from the money printing without the cushion of free cash.

According to the latest Commerce Department report, retails sales for June rose an anemic 0.2 percent. However, when adjusted for inflation, retail sales have actually fallen 2.5 percent over the past year. Additionally, U.S. industrial production has turned negative on a year-over-year basis for the first time since the lockdown era, and factory output fell 0.3 percent. These numbers, in conjunction with plummeting tax revenue, portend a major recession. Indeed, the New York Fed believes there is a 67 percent likelihood of a recession within the next 12 months.

Consumers are plum out of cash and wiped out by the higher cost of living now that the “stimulus” effects have been depleted. The June SCE Credit Access Survey published by the Federal Reserve Bank of New York further demonstrates the precarious nature of household finances. The survey measures the difference between the average probability of a credit applicant’s ability to come up with $2,000 within a month and an applicant needing $2,000, and it fell to the lowest level since data was recorded. Furthermore, the rejection rate for credit applicants hit a five-year high. The rejection rate for auto loans was so high that it surpassed the application rate. In total, non-revolving credit, which includes student loans and car loans, decreased $1.3 billion in May, the first decline since the COVID crash in April 2020.

In addition to lending grinding to a halt because consumers are in a precarious financial situation, banks are also going to tighten lending because high interest rates are causing rapid outflows of cash from bank deposits to money market funds. With the Fed expected to hike rates again in an ill-fated bid to tame the inflation it helped create, banks will further suffer from the inverted yield curve – when the cost of borrowing money in the short term is more expensive than the interest for long-term lending, thereby dissuading them from extending more lines of credit.

But fear not, the large banks and corporations involved in ESG will always do well, thanks to the anti-market forces created by endless money printing and monetary manipulation. In truth, we haven’t lived in anything resembling a free market since before the fiscal and monetary socialism of 2008, accelerating even further in 2020. Bidenomics is just the icing on the cake.


Daniel Horowitz is a senior editor of TheBlaze and host of the Conservative Review podcast. He writes on the most decisive battleground issues of our times, including the theft of American sovereignty through illegal immigration, the theft of American liberty through tyranny, and the theft of American law and order through criminal justice “reform.”