Illustration: Chen Xia/GT
The US government reported that its economy grew 6.5 percent on an annualized basis from April to June in 2021 – about two percentage points lower than what was forecast by most economists. Obviously, the much-vaunted strong recovery from the deep recession in 2020, caused by Donald Trump’s porous measures to deal with Covid-19, has hit a snag.
It is safe to say the world’s largest economy is facing serious problems, although the US Federal Reserve and the Biden administration won’t admit the scale of the challenge. Over-flooding the country’s financial system with fiscal stimulus as well as the Fed-printed liquidity has truly buoyed Wall Street with the stock indexes skyrocketing for many months, but it has largely failed to fire up the US economy to accelerate, consistently.
A negative side-effect of the over-flooding policy has now emerged, as…