Thread by @dcpetterson

This is very good news.

Interest rates have been at historic lows since the Bush Great Recession of 2008, in an effort to heat up the economy. Republicans did all they could to stall the recovery during Obama's presidency. Despite that sabotage,...

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cnbc.com/2022/03/16/fed…

... unemployment fell far below the level economists usually call "full employment." Obama even managed to shrink the deficit faster than any time since WW2. The stock market boomed.

For his first three years, Trump did little to alter the course of the Obama economy, ...

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... other than ballooning the deficit to create still more economic growth.

Trump had planned to run for reelection on the strength of that economy, bragging about how good it was (while Republicans had tried to convince you for the Obama years that it was terrible).

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Then COVID hit, and Trump ignored the pandemic, under the conviction that any steps taken to fight the disease would hurt the economy that Obama had created and that Trump wanted to run on.

That scheme backfired.

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Trump's criminal mismanagement resulted in the fastest and hardest economy collapse in a century.

The Fed had to lower interest rates further to stimulate the economy, and Congress had to institute massive economic relief packages, creating huge record deficits.

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But with Congress and the White House under Democratic control, the economy is rapidly recovering. We're back to record low unemployment, a booming GDP, and demand for goods and services growing so fast that production can't (yet) keep up.

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When demand outpaces supply, classic economics says prices will be forced to rise. That's what we're seeing. It's a sign of an economy healthier than anyone could have predicted in late 2020.

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Amazingly, the annual budget deficit will shrink by a trillion dollars this year!--partly due to increased tax revenue from the surge in growth.

The Fed has limited ways to slow demand and thus bring down the rate of inflation. Increasing interest rates is one of those.

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That's why interest rates are going to rise--we no longer need historically low rates to encourage recovery from the Republican Recession of 2008 and the Republican Pandemic of 2020-2021. In fact, those incredibly low rates are now proving to be actively harmful.

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So when the Fed starts inching rates up, understand why. It's because Democratic policies work to put food on the table, cars in garages, and even let Americans afford some luxuries.

#DemocratsDeliver
#BidenDelivers

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cnbc.com/2022/03/16/fed…