An article in the Wall Street Journal asks, Will the U.S. Economy be able to withstand four economic shocks at the same time? The four are:
- The UAW Strike
- A government shutdown
- The resumption of student loan payments, and
- Rising oil prices
The article states, “Together, they could be more damaging, particularly when the economy is already cooling due to high interest rates.” Most economists seem to be predicting a bumpy fourth quarter.
How will it impact You?
For those of us out here in the trenches rather than in a white tower, here is my thinking:
- The UAW strike may have a limited impact in some area, but we all know it will come to an end.
- I wish there was a way to use the government shutdown as an excuse to pare down the size of the government. While this will potentially cause some disruptions, we all know payments will eventually resume and any missed payments will be made up. While this may impact some people financially for a short time, it won’t last. For most of us, it’s just an inconvenience.
- As for student loans? Each payment made on a loan is money not being spent on food, energy, and other living expenses. It is money being taken out of the economy, so it should have a mild deflationary affect overall. For those who make the payments, it might feel like their own personal recession.
- The rising price of fuel will have the greatest financial impact on the economy and on each of us as individuals. Even if we do not drive, the rising fuel costs will be reflected in everything we buy that had to be transported to market. Diesel fuel prices are reflected in rising food and other prices. It will also trickle into higher energy costs, especially for those who buy home heating oil.
In summation, each economic hit we take tilts the slippery slope a little further, bringing the threat of an economic or social collapse a bit closer. Will we survive this quadruple threat? I expect so, but it’s that camel and the stick story. You never know which one will break the camel’s back.
Published 9/24/2023. Read the full article. (Subscription may be required)