It’s not as if these rising costs are reaping benefits — quite the opposite. A recent release from the National Assessment of Educational Progress (NAEP), for example, suggests that our schooling isn’t providing the skills young people need. Some states’ Covid-era pause on up to two years of in-person learning is partly to blame, but with schools making excuses to lower standards for students of all grades, it’s time to admit that out-of-control tuition costs — which have more than doubled since 2000 — aren’t the only way that our education systems aren’t delivering.
Data from regional Federal Reserve banks, including Dallas, New York, Philadelphia, and Richmond, show new orders for businesses have been trending down for almost an entire year and have now plummeted to the point where current output levels cannot be sustained. Once firms work through their backlogs of unfilled orders, they will have to scale back output. That means layoffs and unemployment, which yields less income, consumer spending, and GDP.
Indeed, central banks around the world laid the groundwork for economic pain when they decided to finance trillions of dollars in unfunded government spending in 2020. As those central banks continued — and in some cases accelerated — their excessive money creation throughout 2021 and into 2022, a global downturn became inevitable. The Fed, for example, rapidly expanded its balance sheet every month in 2021 and began 2022 by increasing its monthly bond purchase by an additional $27 billion.