{"id":2175800,"date":"2024-02-14T03:58:02","date_gmt":"2024-02-14T08:58:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/democrats-scramble-to-fix-consequences-of-their-spending-because-its-election-year\/"},"modified":"2024-02-14T04:04:28","modified_gmt":"2024-02-14T09:04:28","slug":"democrats-scramble-to-fix-consequences-of-their-spending-because-its-election-year","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/democrats-scramble-to-fix-consequences-of-their-spending-because-its-election-year\/","title":{"rendered":"Democrats rush to address the repercussions of their spending as the election looms"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">26<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fdemocrats-scramble-to-fix-consequences-of-their-spending-because-its-election-year%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2175800&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div class=\"article-content\">\n<h2 class=\"wp-block-heading\">Elizabeth \u200bWarren&#8217;s Economic\u2064 Revelation<\/h2>\n<p>Spare \u200dsome \u2062crocodile tears for Sen. Elizabeth Warren. She finally \u2064discovered one of the basic principles of\u200c economics \u2014 in an election year and \u2063at a time when said principles \u200bare proving politically inconvenient to her and her Democratic \u200bcolleagues.<\/p>\n<p>Recently, the Massachusetts \u2063Democrat and three \u200dof her \u200cSenate\u200d Democrat colleagues \u2064wrote to Federal Reserve Chairman Jay Powell asking \u200bhim to \u200dbegin lowering \u2064interest\u2062 rates.\u2064 The missive, which invoked the \u200bhardships families are\u200d facing around the country under the current interest rate environment, would sound far more reasonable \u200cif Warren and her allies \u200bhadn\u2019t \u2062created many of the conditions \u200dmaking the interest rate hikes necessary in the first place.<\/p>\n<blockquote>\n<h3 class=\"wp-block-heading\">Consequences of Interest Rate Policies<\/h3>\n<p>The <a href=\"https:\/\/www.warren.senate.gov\/imo\/media\/doc\/2024.01.28%20Letter%20to%20Federal%20Reserve%20on%20Housing%20Market.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">letter<\/a> \u2063 from Warren and\u2062 her colleagues focuses on the housing market \u200dand specifically the \u2064lack of \u200daffordability. It complains \u2064that \u201cmortgage rates have risen to 20-year highs in the past year \u2014 a direct\u200b result \u2062of the Federal Reserve\u2019s campaign of aggressive hikes to the \u2062federal funds rate.\u201d It notes that\u200b \u201cinterest rates are still \u2062too high for many American families,\u201d and\u2062 urges the Fed \u201cto \u2063consider the\u2063 effects of your \u2064interest rate \u2062decisions on the housing market\u200d and to\u2062 reverse the\u2064 troubling\u2062 rate hikes that have put affordable housing \u200bout of \u200dreach for\u200d many.\u201d<\/p>\n<\/blockquote>\n<p>Indeed, families <em>are<\/em> struggling to afford\u2062 their first home, putting the American Dream <a href=\"https:\/\/thefederalist.com\/2023\/11\/03\/theres-no-soft-landing-waiting-for-the-millions-of-families-suffering-from-bidenomics\/\" target=\"_blank\" rel=\"noreferrer noopener\">out of reach \u2063for many<\/a>. But\u200d Warren\u2019s simplistic formulation\u2062 ignores many politically \u200dinconvenient truths, most of them \u200ccentered around the \u2062ways \u2062in which government meddling \u2062over the past several \u200bdecades \u2014 by lawmakers themselves, \u200bas well as the Fed \u2014 has created the current problem.<\/p>\n<blockquote>\n<h3 class=\"wp-block-heading\">Interest Rates Were Too Low for Too Long<\/h3>\n<p>Warren and her \u201ceasy money\u201d colleagues omitted\u2063 any discussion of low interest\u200c rates from their letter. But the fact remains that, over the past two decades, a\u2063 series of \u2064decisions by \u200dthe Fed, from \u2064keeping interest rates low in the 2000s to rounds of quantitative easing (i.e., printing \u2064money)\u200d during the financial crash\u2064 and the pandemic,\u2062 got most of the American \u2064economy <a href=\"https:\/\/thefederalist.com\/2021\/07\/16\/why-you-should-blame-the-federal-reserves-easy-money-for-todays-inflation\/\" target=\"_blank\" rel=\"noreferrer noopener\">addicted to cheap \u200bmoney<\/a>.<\/p>\n<p>That trend swallowed up big \u2062businesses, Wall Street and the financial sector, and ordinary <a href=\"https:\/\/thefederalist.com\/2023\/11\/03\/theres-no-soft-landing-waiting-for-the-millions-of-families-suffering-from-bidenomics\/\" target=\"_blank\" rel=\"noreferrer noopener\">Americans looking to buy homes<\/a>. On\u200c an actuarial and economic basis, the concept \u2063of a 30-year mortgage at a\u200c 3 percent interest rate seems totally\u2063 unrealistic, and it was until the Fed\u2063 started,\u200b and \u2064kept, intervening in financial\u200d markets with its proverbial printing presses.<\/p>\n<\/blockquote>\n<p>But because persistent and cheap\u2062 money <a href=\"https:\/\/thefederalist.com\/2021\/07\/16\/why-you-should-blame-the-federal-reserves-easy-money-for-todays-inflation\/\" target=\"_blank\" rel=\"noreferrer noopener\">juiced housing prices<\/a> into \u200bthe stratosphere, it will take a period\u200b of time, likely several years, \u200dfor both buyers and sellers to figure \u2064out the \u201creal\u201d value of properties in a more <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/despite-skyrocketing-inflation-janet-yellen-will-keep-pushing-for-biden-spending-agenda\/\" title=\"Despite Skyrocketing Inflation, Janet Yellen Will Keep Pushing For Biden Spending Agenda\">normal interest rate environment<\/a>. Trying \u2064to\u200d short-circuit\u2062 that process by stimulating more demand will only yield another round of\u200c \u201cboom-and-bust\u201d that \u200dalready \u200bbrought\u2062 us a\u200d historic financial \u2062crash and some of\u2062 the highest \u200binflation in four decades.<\/p>\n<blockquote>\n<h3 class=\"wp-block-heading\">Low Interest Rates Punish Savers and Retirees<\/h3>\n<p>Warren and \u200bher colleagues ignore the\u200d flip\u2062 side of the persistently low\u200b interest rate environment of \u200dthe\u2064 past two decades: \u200bRetirees and \u2063people who\u2063 save money <a href=\"https:\/\/thefederalist.com\/2018\/10\/29\/attacking-federal-reserve-trump-actually-attacks-savers\/\" target=\"_blank\" rel=\"noreferrer noopener\">got the proverbial shaft<\/a>. For most of \u2063this century, savers have faced the heretofore rare phenomenon\u2064 of <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/exclusive-jeff-brown-green-new-deal-build-back-better-great-reset-all-intertwined\/\" title=\"Exclusive -- Jeff Brown: Green New Deal, Build Back Better, Great Reset All Intertwined\">negative real interest rates<\/a> \u2014 that is,\u2064 individuals who left their money in the bank would\u200d see\u200b the \u200cvalue of that money eroded every year by\u200c inflation.<\/p>\n<p>And while younger\u2062 individuals can afford to\u200d move more of their assets\u2064 from \u201csavings\u201d accounts paying\u2064 0.5 percent into stocks or\u2062 bonds,\u2064 older Americans could lose their retirement \u200bassets should they do \u200dso. Yet that\u2019s \u200dthe prospect retirees\u200b have\u200c faced: They could either \u2064roll\u200c the dice in the stock market\u200d and\u2062 see a crash wipe away much of their life savings\u2062 (as it\u200d did\u2062 to\u2062 some in 2008-2009), or keep their money in the \u2063bank to \u2062earn bupkis in interest, and see its\u200c value\u200c diminish with each passing \u2064year.<\/p>\n<\/blockquote>\n<blockquote>\n<h3 class=\"wp-block-heading\">The Spending Binge \u200bEncouraged \u2064Higher Rates<\/h3>\n<p>It should\u2064 go without saying, but the Federal\u2063 Reserve\u200b needed\u2063 to\u200b raise\u2063 interest rates so high, \u2064and so quickly,\u200b due in no small part\u2062 to \u2064the\u200c inflation sparked by trillions of \u2062dollars of \u201cstimulus\u201d spending\u2064 during the pandemic. While Warren and her colleagues attacked the Fed\u2019s interest\u200b rate hikes, they said\u2062 not \u2062a word about\u200c the\u200d reasons for said hikes because\u2063 to do so would\u2064 have forced them to look in the mirror.<\/p>\n<\/blockquote>\n<p>This space has <a href=\"https:\/\/thefederalist.com\/2022\/12\/13\/2024-gop-contenders-should-cue-struggling-americans-in-on-their-intended-nominees-for-the-fed\/\" target=\"_blank\" rel=\"noreferrer noopener\">previously criticized Powell<\/a> for <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/no-bidenomics-wont-end-in-a-soft-landing\/\" title=\"Bidenomics won't lead to a smooth outcome.\">keeping interest\u200d rates<\/a> so \u200blow \u200cfor so long during the pandemic, even as inflation\u2064 persisted in late \u200b2021 and\u2063 into 2022. But\u200c at least Powell has had the decency to apologize for the Fed\u2019s inaction, most recently during\u200c his <a href=\"https:\/\/www.cbsnews.com\/news\/full-transcript-fed-chair-jerome-powell-60-minutes-interview-economy\/\" target=\"_blank\" rel=\"noreferrer noopener\">interview<\/a> \u200cwith\u200c \u201c60 Minutes\u201d: \u201cIn hindsight, it would\u2019ve been better to have tightened [monetary] policy earlier. I\u2019m happy to say that.\u201d I won\u2019t hold my breath waiting for Warren to \u200capologize \u200bfor the effects of Washington\u2019s big-spending binge in sparking the highest inflation in two generations.<\/p>\n<blockquote>\n<h3 class=\"wp-block-heading\">Don\u2019t Create Another Bubble<\/h3>\n<p>Given how wrong Warren and her \u2063ilk have \u2062been on the problems associated with easy money \u2014\u2062 both low \u2064interest rates and high spending \u2014 the Fed should pay the senators\u2019 latest missive little heed.\u2064 Rebalancing the housing market will take time, and yes, it may cause some pain \u200dfor some families. But a change in the way <a href=\"https:\/\/www.wsj.com\/lifestyle\/careers\/realtor-career-real-estate-industry-3b1dcf41?mod=trending_now_news_5\" target=\"_blank\" rel=\"noreferrer noopener\">houses \u2063get sold<\/a> may provide some price relief to buyers in the \u2063immediate future.<\/p>\n<p>Ultimately, Warren\u2019s strategy of\u2062 stimulating \u201caffordable\u201d housing \u2063through more government interventions\u2062 and cheap money will just artificially \u200binflate asset prices \u200dagain. \u200bAnd as the \u200bpast few years\u2064 have demonstrated, Americans don\u2019t need government creating \u2063more inflation headaches for them, whether that comes to pumping up home prices or \u200braising the cost of staples at the grocery \u2064store.<\/p>\n<\/blockquote>\n<hr class=\"wp-block-separator\">\n<\/div>\n<p> <\/p>\n<h2> What are the adverse effects \u2062of the Biden administration&#8217;s economic \u2064policies on millions of\u200b families?<\/h2>\n<p><span>  Eralist.com\/2023\/11\/03\/theres-no-soft-landing-waiting-for-the-millions-of-families-suffering-from-bidenomics\/&#8221; target=&#8221;_blank&#8221; rel=&#8221;noreferrer noopener&#8221;>previously \u200bdiscussed<\/a> the\u2062 adverse effects of\u2062 the Biden administration&#8217;s\u2063 economic policies, which have led \u2064to skyrocketing inflation and an affordability crisis. And now, Sen. \u2064Elizabeth\u2063 Warren, known for \u2062her progressive stance on\u200c economic\u200d issues, seems to be realizing the consequences\u2064 of \u2062these policies, albeit \u2063belatedly.<\/p>\n<p>In a letter addressed to Federal Reserve Chairman Jay \u2062Powell, \u200bWarren and three other Senate Democrats called for a lowering of interest\u2064 rates. They argued that mortgage rates have\u200b reached 20-year highs, making housing unaffordable for many American families. While their concern for struggling families \u200dis valid, it is essential to\u200c examine\u2063 the underlying causes of the current\u200c interest rate environment.<\/p>\n<p>The letter conveniently ignores the fact that the government&#8217;s intervention in the economy, spearheaded by lawmakers and the \u2063Federal Reserve, \u2064has contributed\u200b to the problem. Over the past two decades, the\u200d Fed&#8217;s decision to maintain low interest rates\u200c and engage in quantitative\u2062 easing has\u2064 created \u200can economy\u200b reliant on cheap money. This artificially inflated housing prices and made the concept of a 30-year mortgage with a 3 percent interest rate seem unrealistic.<\/p>\n<p>Attempting to stimulate \u2063more demand and \u200dartificially prop up housing prices in the face of\u200d rising interest \u200drates would \u2063only \u2063exacerbate\u200b the problem. It would lead\u200b to another boom-and-bust cycle that could \u200dhave severe\u200d consequences, \u2064as\u200c witnessed during the\u2062 historic financial crash \u2062and the subsequent high \u2062levels of inflation.<\/p>\n<p>While Warren and her colleagues attribute the \u2064current interest rate hikes solely to the Federal\u200c Reserve, they conveniently ignore the role of government spending. The trillions of dollars spent as \u2064part of the pandemic stimulus packages have fueled inflation, forcing the Federal Reserve to raise interest rates. Addressing interest rate hikes without acknowledging the \u2064inflationary pressures caused by \u200breckless spending is\u2064 disingenuous.<\/p>\n<p>Furthermore, the persistently low interest rate \u2062environment \u2063has negatively\u2063 impacted savers and retirees. With negative real interest rates, individuals who keep\u200c their \u2062money in savings accounts\u2064 see \u200dthe\u2064 value of their savings \u200berode each year due to inflation. Younger individuals may have the option to invest in stocks or bonds, but older Americans are left with the choice of \u2062risking their retirement savings in the volatile stock market or earning minimal\u200c interest in the bank.<\/p>\n<p>The current situation calls for \u2064a holistic and comprehensive\u2064 approach. It is not enough to blame\u200b the Federal Reserve for interest rate hikes without acknowledging the root \u200bcauses of\u2062 the problem. Addressing the\u2062 affordability crisis and the adverse effects on\u2062 savers and retirees\u200d requires a reevaluation of the government&#8217;s role in the economy and a focus on \u2063responsible fiscal policies.<\/p>\n<p>In an election year, \u2064it \u2064is easy for politicians to shift blame or push for quick-fix \u2063solutions without considering\u2063 the long-term consequences. Sen. Elizabeth\u2062 Warren&#8217;s \u200dcall for\u2064 lower interest \u2063rates\u2062 may resonate with\u200b some voters, but it disregards the complex economic realities created by government intervention. As we \u200bmove forward,\u2063 it is essential to prioritize sound economic policies that promote sustainable growth, affordability,\u2064 and stability for all Americans.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Spare some crocodile tears for Sen. Elizabeth Warren, who just grasped an elementary economic principle during an election year. Unfortunately for her and fellow Democrats, this realization comes at an inconvenient time. Alongside three Senate colleagues, the Massachusetts Democrat penned a letter to the Federal Reserve, acknowledging this newfound understanding<\/p>\n","protected":false},"author":521,"featured_media":2175801,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/thefederalist.com\/wp-content\/uploads\/2024\/02\/Screen-Shot-2024-02-13-at-11.48.01-AM-1024x569.png","fifu_image_alt":"","footnotes":""},"categories":[546],"tags":[],"class_list":["post-2175800","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-federalist"],"fifu_image_url":"https:\/\/thefederalist.com\/wp-content\/uploads\/2024\/02\/Screen-Shot-2024-02-13-at-11.48.01-AM-1024x569.png","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2175800","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/521"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2175800"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2175800\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2175801"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2175800"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2175800"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2175800"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}