Are We In a Recession?
The U.S. is racing toward a national debt of $36 trillion and will likely surpass this benchmark before the end of the year, according to public finance economist EJ Antoni.\xa0\nIn homes across the country, Americans are indirectly feeling the weight of the national debt through inflation, and Antoni, who serves as a research fellow at The Heritage Foundation, uses the analogy of wine to explain how.\xa0\nThe Federal Reserve finances a great deal of the national debt, Antoni explains, but "unlike the Treasury, which has to finance everything either through taxes or borrowing money, the Federal Reserve actually can just create money.\u201d\xa0\nWhen the Federal Reserve creates money, \u201cit's like you're pouring water into wine and you're literally watering it down," Antoni says. "So yes, you now have more wine per se, but you don't have the same concentration of alcohol. So if you were to, as a bartender, pour this out to a bunch of glasses, ... you are now cheating each of your customers on exactly the amount of water you have put into all of their glasses. That's essentially what the Federal Reserve has done by creating literally trillions of dollars in just a few years in order to finance the runaway deficit spending we've seen here in Washington.\u201d\xa0\nThe political environment in which the Federal Reserves operates makes it \u201cvery easy to see that these massive government deficits are really what's at the heart of inflation, even if they don't cause it in a strictly academic sense,\u201d according to Antoni.\xa0\nAntoni joins \u201cThe Daily Signal Podcast\u201d to address growing concerns over a recession and what the immediate future may hold for the U.S. economy.\nEnjoy the show!