Grand Canyon Times

Democratic Senator Mark Kelly lauded the passing of a microchip manufacturing bill in the Senate in a tweet on July 27 amid reports of a second consecutive quarter of negative gross domestic product (GDP). The bill awaits the signature of President Joe Biden before it can be made into law.

"After more than a year of hard work and negotiations, the Senate passed our microchip manufacturing bill!" Kelly said. "We’re almost at the finish line. With Arizona leading the way, this will lower costs of everyday goods and create tens of thousands of high-paying jobs."

Following an annual declination rate of 1.6% in the first quarter of 2022, The country’s GDP dropped another 0.9% in the second quarter, according to the Bureau of Economic Analysis' (BEA) latest release for quarter two, signifying the shrinking of the American economy.

Many economists believe that inflation is tied to government overspending. Paige Terryberry, Senior Analyst for Fiscal Policy at the John Locke Foundation, suggested in an article that America’s current inflation crisis is due to massive amounts of government spending in response to the COVID-19 pandemic and the shutdowns that followed.

Despite public concerns, Democrats have continued to support legislation involving billions of government dollars being spent on various areas. In mid-2021, President Biden proposed a $6 trillion budget for the 2022 fiscal year for use in education, transportation, and climate change programs. New York Times White House correspondent Jim Tankersley said that the proposal "would take the United States to its highest sustained levels of federal spending since World War II."

The Washington Post reported in April that, as a result of the package, the Biden Administration launched a $6 billion program to bail out operators of economically-challenged nuclear power plants. The Department of Energy branded the move as a part of the administration’s strategy to combat climate change.

On Wednesday, centrist Democratic Sen. Joe Manchin, who has often served as a roadblock for many of the President’s more ambitious goals, announced a deal with Democratic Senate Majority Leader Chuck Schumer on a bill that includes $430 billion in spending on areas such as energy, electric vehicle credits, and health insurance. The Senate also recently passed the CHIPS-plus or Chips and Science Act, which Sen. Kelly supported, and which would allocate over $52 billion for U.S. companies producing computer chips.

The White House has avoided declaring a recession, instead focusing on the importance of fostering job growth and creation. In a recent press briefing, White House press secretary Karine Jean-Pierre said that “we are not currently in a recession or a pre-recession”. Treasury Secretary Janet Yellen said on Meet the Press that, while two consecutive quarters of negative growth typically reflect a recession, "when you're creating almost 400,000 jobs a month, that is not a recession." In addition, a recession can only be formally declared by a group of economists from the nonprofit, nonpartisan National Bureau of Economic Research.

However, other economists insist that government overspending is a prime cause of rising inflation. "There has never been a period since WW2, where there were two-quarters of declining GDP and the NBER has not later declared there was a recession," Wayne Winegarden, a senior fellow in business and economics at Pacific Research Institute, said to the Grand Canyon Times. "Real wages are still in decline, and inflation is eroding families’ budgets. So regardless of whether a recession is officially declared or not, this is a terrible economy creating too little opportunities for people."