Dr. Rasmus discusses in depth the causes and consequences the Fitch Credit Rating Company’s decision this past week to downgrade the US government’s credit worthiness. What’s behind the decision? What are some of the consequences? Rasmus reviews the past 22 yrs of rising US deficits and debt and why deficits continue to rise more than $1 trillion a year, the national debt surpasses $34T now (going to $43T) and the economic implications of annual interest payments on the debt now exceeding $600B/yr (going to $900B). The contradictions are intensifying for US Neoliberal Fiscal Policy as well as Neoliberal Monetary Policy. What Fed rate hikes have had minimal effect on services inflation and now threaten to exacerbate US regional banking and commercial real estate sectors of the economy. How the imminent shift by the BRICS economies toward trading in their own currencies (instead of $) will exacerbate monetary policy contradictions, US inflation and GDP. Dr. Rasmus reviews today’s Jobs Numbers, which show little change in services jobs (and inflation) over the past year. (Next Week: What Is Labor Exploitation and How Has It Intensified Since 1980)

With Teamsters-UPS contract negotiations deadline of end of July approaching, the Writers-Sag-Aftra unions’ strike continuing, and Auto workers about to begin bargaining to reverse past concessions, is union Labor about to rise again? Dr. Rasmus describes the various forces behind US labor’s ‘Great Detour’ that began in the late 1970s and continuing now for more than four decades: offshoring of jobs, free trade deals, deregulation of transport and communications, shift to services, substitution of precariate jobs (part time, temp, gig), ‘WalMart Effect’, pro-company NRLB & court shift, atrophy of minimum wage and wage guarantees, top union leadership dependency on the Democrat party, expanding of open shop and anti-labor legal offensives, etc. What happened with last year’s Railroad Union negotiations. Will new leadership of Teamsters and Auto workers unions and new worker militancy mean the beginning of the end of the ‘Great Detour’ of union labor in America? The show then describes why Biden’s current tour promoting his economic policies are not what they seem. Rasmus describes the truth about jobs, wages, inflation, and GDP today.

The mainstream media is now spinning last week’s inflation reports to message that inflation is now under control, therefore the Fed won’t need to raise rates further, and that in turn means a ‘soft landing’ with no recession. Dr. Rasmus dissects both the consumer price index and producer price index reports issued last week. Reports show that ‘goods’ (manufactured things and construction) prices have abated in price, but Services prices (80% of US economy) remain stuck in the 5-6% annual range. In fact, June CPI shows services prices rising more (6.2%) compared to May (5.3%). While some sectors of services are declining (airline,hotels prices) rents remain high. Simultaneously, after falling sharply, energy (gasoline, etc.) prices are rising again as are commodities, housing and utilities. Rasmus explains some of the questionable methods the US Labor Dept uses to dampen actual price hikes—like ‘owners equivalent rent’, ‘hedonic pricing’, outmoded ‘weights’ given certain goods, and by selectively using 14 different ‘base periods’ for different key items in the index. Rasmus concludes, services inflation and price gouging remain the defining conditions of current chronic inflation. And that the Fed can’t raise interest rates higher without further exacerbating the regional banking instability

This past week the Biden administration launched a new PR offensive, touting its package of economic policies as a reversal of ‘trickle down’ economics the past 40 years. Bidenomics is supposed to be a break from the past 4 decades of Neoliberal economic policies. In today’s show Dr. Rasmus debunks the current ‘Bidenomics’ PR offensive, describing how it is a continuation of classical Neoliberal policy (fiscal, monetary, industrial and external) since Reagan. Rasmus defines the essential features of Neoliberal fiscal, monetary, industrial and trade/external policies and then fills in the details of Biden policies showing they are classic Neoliberal. Rasmus argues the ‘Bidenomics’ PR offensive is also classic neoliberal ideology (ideology defined as conscious misrepresentation of fact and reality in the service of special interests by manipulation of language). Summarized, Bidenomics is the continuation of neoliberal ‘trickle down’. Rasmus concludes with an assessment of the 4 dimensions of neoliberal economic policy future and the growing theme on the left that Neoliberalism is in growing crisis. Rasmus agrees 3 of the 4 areas of Neoliberal policy are facing growing contradictions and crisis, with the exception of neoliberal industrial policy (anti-union, anti-strike, wage-benefit compression, privatization, deregulation) remaining strong under the Biden administration. (For an analysis of evolution of Neoliberal policy from late 1970s until 2020, check out Dr. Rasmus’s book “The Scourge of Neoliberalism: US Economic Policy from Reagan to Trump”, Clarity Press, 2020)

Dr. Rasmus examines some facts about Russia’s mercenary Wagner group and its leader, Prighozin, recent mutiny. What are some interesting facts behind the origin of the rebellion not reported by the US mainstream media? The show next addresses in depth the US Supreme Court’s decision to scuttle Biden’s proposed $10-$20K student debt forgiveness proposal. Why 43.5m student debtors can’t get any relief, while 25m small businesses had their $900B in loans under the Covid PPP program expunged by the government and SCOTUS said nothing? The scam called the Student Loan program is discussed in detail and what the SCOTUS decision may mean for all businesses. The show concludes with an examination of whether Biden’s economic policies (aka Bidenomics) represent a crisis for US neoliberal policy in general. Why Biden’s policies are classic neoliberal but also reveal a growing crisis in US neoliberal policy in its monetary, fiscal and trade/dollar variants. (For more on the Prighozin Rebellion, check out Dr. Rasmus’s July 1 blog piece: ‘Prighozin’s Rebellion and the Third Offensive’ at his blog, http://jackrasmus.com

What’s behind the Fed’s decision to temporarily halt rate hikes this past week? Then raise rates later again this year? Dr. Rasmus explains the Fed is more concerned in the short run with exacerbating the continuing regional banking crisis than intensifying efforts to slow inflation by raising rates. Fed policy faces a contradiction: raise rates and worsen banking system instability (which the Fed has been offsetting with weekly injections of $95B to stabilize since March), or, not raise interest rates for a while and live with inflation. Rasmus dissects the latest CPI report that shows continuing services sector inflation of 6.3%-6.6%, even as goods inflation has moderated and energy inflation fallen significantly from last year’s highs. Rasmus explains how and why monetary policy faces growing contradictions and is becoming increasingly ‘inefficient’ (i.e. high rates don’t reduce inflation as effectively as in times past, while lowering rates to zero have less effect on stimulating the economy as well. The causes are late neoliberal capitalism’s globalization and financialization. How and why fiscal policy is also facing growing contradictions and why US global economic hegemony is weakening as de-dollarization trends also appear to be gaining momentum.

Why is inflation in China virtually zero while it remains chronically high in the US and Europe around 5% and more? Dr. Rasmus describes the forces continuing to keep prices high in the ‘west’ and why China’s economy has little of the same. Supply side issues, corporate price gouging, net exports import prices, currency values, and productivity/unit labor costs—all driving inflation in US—are conspicuously absent in China. The second half of the show addresses the emerging Ukrainian military offensive-the third such during the war. Rasmus explains the dynamics of the first two offensives (Russia in spring 2022 and Ukraine’s in late summer 2022), why both succeeded and failed, and the line up of current forces on both sides in the current third Ukrainian offensive. The importance of concentration of forces (first principal of warfare) in all three offensives and why Ukraine’s latest offensive is likely to fail. Scenarios political and military that could follow. Prediction: negotiations will begin before year end 2023 and it’s likely Zelensky will not be at the table.

The May jobs report: why one govt survey shows 339K new jobs and another shows -440k more unemployment. The final version of the Debt Ceiling deal is then reviewed, including last minute Senate additions requiring retroactive student debt interest payments. The Deal as classic Neoliberal capitalist fiscal policy: Pentagon gets $886B (+more in ’24). Discretionary social spending gets cut $2.1T (18%). No tax hikes to pay for projected further $4T deficits & debt (at $35T or more in 2025) Other details of Deal. Rasmus then discusses whether Fed will ‘pause, skip or raise’ interest rates again next meeting. Why US economy ‘goods producing’ sector recession is deepening and will spill over to services by year end 2023.

Dr. Rasmus describes the likely terms of an imminent debt ceiling deal about to be announced this weekend. Reportedly ‘caps’ will be imposed on non-defense social program spending in a two year agreement, while Pentagon spending will rise 11% in the 2024 fiscal budget and an undisclosed further rise in 2025. Some of the possible details are considered: left over Covid funds, student debt cancellation, IRS hiring, work requirements to receive food stamps and Medicaid, fossil fuels licensing and environmental reviews. The NY Times estimates a 18% cut in non-defense spending while Pentagon spending (and higher still total Defense spending) rises. No tax increases to pay for the Pentagon hikes, especially no changes in Trump’s $4.5T 2017 tax cuts. Meanwhile, the CBO estimates failure to reverse the Trump tax cuts will result in a $2.7 trillion boost to the US deficit and debt, now at $31.4 trillion. How real is the US debt default if no deal? And what are some constitutionality issues

What’s behind the debt ceiling negotiations?  Is June 1 the real deadline date? Dr. Rasmus describes what’s happened to the national debt since 2000 and the causes for its rise from $4T to $31.4T and why interest on the debt is projected to accelerate rapidly to nearly $1T/yr by end of this decade.

How much have the declining share of tax revenue contributed to the annual US budget deficits and thus the national debt? War and Defense spending? Social program spending? Rasmus reviews the various fiscal policies since Covid—3 Covid relief spending plans in 2020-21 followed by 3 business subsidy and investment plans in 2021-22 by Biden.

Why the debt ceiling negotiations are really a cover about how much social program spending to cut in the next federal budget beginning October 1, 2023. Once the debt ceiling is raised again, what’s the prospect for further budget deficits and still more increases in the US national debt?