【 World Theory 】 US Media: Currently, there is a serious disconnect between ideals and reality in the United States, and the differences between the two parties have caused an economic deadlock that is difficult to resolve

China Daily, September 12 (Xinhua) - US economist Paul Krugman stated in a newspaper article in New York on September 9 that if current US President Biden fails to win re-election in the 2024 US election, a key factor will be the widespread belief that the US economy will perform poorly under his leadership. Because, according to multiple previous polls in the country, Americans have a very poor evaluation of the economic situation, and their support for the US government's continuous praise of "Bidennomics" is also very low. The continuous divergence between the two parties in the United States is undoubtedly an important factor leading to this phenomenon.

Screenshot of New York Times report

On September 11th local time, data released by the Federal Reserve Bank of New York showed that consumer inflation expectations for August in the United States were 3.6%, an increase from 3.5% in July. Krugman mentioned in the article, why is there an improvement in the US innovation high inflation rate compared to the previous two years, but people's views on the US economic situation still so negative?

Krugman stated that there are two different views in society regarding the disconnect between public economic concepts and economic reality. One view is that there are indeed economic issues in the United States, and the public has reason to hold a negative attitude. The public hates inflation, even though their income can keep up, the wages a year ago were indeed somewhat low. Another viewpoint holds that in reality, the public is always right. If people feel that they are not doing well, they should identify the reasons instead of preaching to make them feel better.

The article points out that multiple citizen and consumer behaviors in the United States indicate that although most Americans feel they are doing well, they still believe that the country's economic situation is very poor. For example, the Federal Reserve conducts an annual survey of the economic conditions of households in the United States. At the end of 2022, 73% of households stated that they were "at least financially sound," but this was lower than the previous year, but not significantly lower than the figure for 2019. However, in 2019, half of the surveyed Americans stated that the country's economic situation was good, but by 2022, this number had dropped to only 18%.

Regarding the issue of inflation, according to a recent poll by The Wall Street Journal, 74% of Americans believe that the direction of the US inflation rate over the past year has been wrong, which is vastly different from the data released by relevant US agencies showing a decline in inflation rates. Krugman believes that there is indeed a disconnect between Americans' views on the economy and reality, not only based on official data, but also on their own experiences.

The United States is constantly embroiled in partisan disputes, and a bipartisan agreement is difficult to curb the surge in US debt. The roof is collapsing, and the finances are in jeopardy.

As for why does disconnection occur? Why does the American public hold a negative attitude towards the current economic situation? Krugman wrote in the article that the continuous division between the two parties in the United States is undoubtedly an important factor. The evaluation of the current economy by Republicans in the United States is roughly equivalent to that of June 1980, when the unemployment rate was twice that of today and the inflation rate was four times that of today. In addition, in the past few years, whether it is inflation or rising interest rates, there may also be a feeling of political disintegration in the United States, which may have planted a sense of dissatisfaction in the minds of the people.

As the US election approaches, officials in the Biden administration are working hard to "market" their economic achievements, Krugman asked, but will public opinion change as a result? No one knows.

However, some reality also proves that the US economy is not recovering as quickly as the US government claims, and the concerns of the American people are not unfounded. According to a report by Consumer News and Business Channel on the 10th, one of the three major rating agencies, Fitch Ratings, announced last month that it will downgrade the credit rating of the United States from the highest level of AAA to AA+. Fitch Ratings stated that the downgrade of the US rating reflects the expected fiscal deterioration over the next three years. Officials in the Biden administration expressed "anger" towards this decision.

Regarding this, Maya McGuinness, Chairman of the Non Partisan Federal Budget Committee, said, "The rating downgrade 'should be an alarm bell'. Regardless of whether people agree with Fitch's decision to downgrade the US government rating, it is clear that the US is on an unsustainable fiscal path." Several rating agencies have also stated in their explanations that the escalating political divisions between the two parties in the US have increased the difficulty of resolving the debt ceiling issue, which has a negative impact on the effectiveness and continuity of policies.

According to The Washington Post, the White House announced at the end of August that it is urging Congress to pass a short-term spending agreement to provide funding for the federal government, in order to avoid the US government running out of money before the start of the new fiscal year on October 1st. This is the second time the US government has fallen into a fiscal crisis since 2023.

According to a recent report by US News and World Report, a poll conducted by the Peterson Foundation at the end of August showed that 7 out of every 10 respondents were concerned that if the US Congress could not reach a budget agreement before September 30th, the government would shut down. The poll also found that 90% of the respondents, including 91% Democrats and 89% Republicans, believed that legislators from both parties should try to avoid the shutdown of the government and find solutions to deal with the growing treasury bond.

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