Belle

Paying more and getting less.

Americans feel worse about their economic outlook than they have since 1952.

Amanda's Friday

Almost half of us aren't making enough to cover our basic needs.

Dr Maslow, please report to the National Day Room. Dr Maslow - to the day room ASAP.

More Slippage

More workers are raiding their 401(k)s as average balances fall, Fidelity says

Key Points

• Retirement balances fell in the first quarter of 2026 amid severe market volatility sparked by the Iran war, according to a new report by Fidelity.
• At the same time, more savers tapped their accounts for cash out of financial necessity.
• Most financial experts advise against raiding a 401(k) since you’ll be forfeiting the power of compound interest.

Financial pressures pushed more savers to tap their retirement accounts in the first part of 2026, new data shows — potentially locking in losses during the early weeks of the Iran war.

Amid severe market volatility earlier this year, the average 401(k) balance fell by 4% to $141,000, according to first-quarter data released Thursday from Fidelity Investments, the nation’s largest provider of 401(k) savings plans.

The average individual retirement account balance was also down 4% to $131,380 in the first quarter, Fidelity found.

The drop was due to the outbreak of the Iran war, which sparked a stock selloff, according to Kirsten Hunter Peterson, vice president of workplace thought leadership at Fidelity Investments. “Luckily, a couple of months later, we are trending in a much better direction,” she said, referring to recent market highs.

After the U.S. and Israel attacked Iran on Feb. 28, the S&P 500 lost 5.1% in March for its worst monthly performance since 2022. The Dow dropped 5.4%, snapping a 10-month winning streak. The Nasdaq declined 4.8%.

Markets have since rebounded from earlier losses. As of Wednesday’s close, the Dow Jones Industrial Average was up roughly 5.3% year to date, while the S&P 500 rose nearly 10% and the Nasdaq Composite gained 14.8%.

More workers are pulling money from their 401(k)s

However, more savers also tapped their accounts to free up cash during this time, which experts say is a sign of underlying financial strain.

The share of workers with an outstanding loan at the end of the first quarter of 2026 was 19.2%, up slightly from 18.8% a year earlier, according to Fidelity. About 2.4% of workers took out a new loan from their 401(k) in the first quarter, up from 2.3% in 2025.

The share of workers taking a hardship withdrawal, which is broken out separately, also rose year over year to 2.5% from 2.3%, Fidelity found. A hardship withdrawal can be taken from a retirement plan without paying an early withdrawal penalty for an “immediate and heavy financial need,” according to the IRS.

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Many households have struggled in the face of rising prices for necessities like groceries and gas due to the Iran war. As a result, consumers have had less room in their budgets to cover an unexpected expense or emergency, experts say.

In most cases, workers take hardship withdrawals for less than $2,000, Fidelity’s Hunter Peterson said, which is “not so significant.” But some are taking more than one hardship withdrawal in a year, which indicates a more precarious financial position. “Those are the type of savers we want to monitor,” Hunter Peterson said.

A 401(k) hardship withdrawal should be a last resort, according to certified financial planner Douglas Boneparth, president and founder of Bone Fide Wealth, a wealth management firm in New York City. Early withdrawals may trigger taxes and a 10% penalty, but “the long-term compounding loss is even larger,” he said.

Why 401(k) hardship withdrawals are on the rise

“The 401(k)-withdrawal trend … reflects broader pressure across household finances as inflation and elevated living costs continue squeezing consumers,” said Boneparth, a member of CNBC’s Financial Advisor Council.

Plus, pulling money out during a market downturn makes it harder to recoup losses in the long run, financial advisors also say.

The households best positioned to weather sudden affordability challenges are the ones with even a modest emergency cushion, Boneparth said. If monthly cash flow is tight, redirect a small amount — such as $25 to $50 a month — into a high-yield savings account as a buffer before cutting retirement contributions, he said.

Meanwhile, the majority of retirement savers continued to contribute during the first quarter, helped by features like auto-escalation, which automatically raises a worker’s savings rate each year, often by a percentage point at a time, Fidelity said.

The average 401(k) contribution rate, including employer and employee contributions, edged up to 14.4%, a record high and just shy of Fidelity’s suggested savings rate of 15%.

“While it can be tempting to make changes to retirement savings during market volatility, it is positive to see participants stay the course with their contributions — an approach that will ultimately strengthen outcomes as retirement nears,” Sharon Brovelli, president of Fidelity’s workplace investing, said in a statement.

Slipping

We're out here gettin' fucked with our pants on, while corporate parasites are pulling down some nice fat profits.

And no, it's not just that simple, but ask yourself - when was the last time you got a 17% raise?

U.S. GDP Growth Revised Lower for First Quarter

The economy grew at a 1.6% annual rate in the quarter, down from the initial reported pace of 2%

The U.S. economy grew more slowly during the first three months of the year, updated government data showed Thursday.

Gross domestic product, a broad measure of the goods and services produced across the U.S., rose at a 1.6% seasonally and inflation-adjusted annual rate in January through March, the Commerce Department said Thursday.

The department previously estimated first-quarter GDP rose at a 2% rate. And economists surveyed by The Wall Street Journal had expected the pace to stay at 2%.

The downgrade to the GDP reading was largely due to a lower estimate for inventory investment, a volatile category that is often subject to large revisions.

Even so, consumer spending on services like healthcare was revised lower for the quarter. Overall consumer spending rose at a 1.4% rate, compared with a previous estimate for 1.6%.

A key measure of U.S. business earnings, profits after tax without inventory valuation and capital consumption adjustments, increased 3.3% from the prior quarter and was up 17% from a year ago. That was the largest year-over-year change in corporate profits since the final quarter of 2021.

Belle

She references Whirlpool CEO Mark Bitzer using the phrase "other recessionary periods" like the economy is already in recession.

Mark Zandi warns America is ‘close to the edge’ with 40% recession risk — and says US stocks are detached from reality

With stocks soaring to fresh highs, recession may be the last thing on investors’ minds. But according to Mark Zandi, chief economist at Moody’s Analytics, America is uncomfortably close to one.

In a recent interview with TheStreet, Zandi said the odds of a U.S. recession over the next 12 months are now sitting at 40%.

“Just for context, in a typical economy, what economists would call the unconditional probability of recession is closer to 15%,” he said. “So, 40% is very elevated, very uncomfortable — it gives you a sense of how close I think things are to the edge here.”

Zandi’s warning came even after a better-than-expected jobs report, with the U.S. economy adding 115,000 jobs in April while the unemployment rate held steady at 4.3% (2).

But the headline number didn’t change his view.

“The labor market is still a vulnerability in the economy, still very soft,” he said, adding that recession risks remain “very high.”

Zandi said businesses remain reluctant to hire, with hiring rates “still very low across most industries.” Hours worked also remain depressed, which Zandi said is “kind of consistent with what you’d see in a recession.”

He also pointed to falling labor-force participation — meaning fewer people are actively working or looking for work — as a warning sign. If participation had stayed steady over the past year, Zandi said, the unemployment rate would be closer to 5%.

At the same time, inflation is becoming a bigger concern. Zandi said price pressures are picking up because of the Iran war, higher energy prices, tariffs and other factors — and that is eating into household purchasing power.

“Real disposable income — that’s after tax, after accounting for inflation — is no higher today than it was a year ago,” he said. “So, there’s been no growth in purchasing power, and that’s going to get worse and start declining.”

That pressure is already showing up in the choices consumers are making.

Zandi noted that wealthy households are drawing down savings to supplement their purchasing power and maintain spending. But lower- and middle-income households don’t have the same cushion.

“They’re living more paycheck to paycheck,” he said.

If Americans have to put more of their paychecks into the gas tank, he warned, they have less left over for everything else — from gym memberships to food choices.

“You’re gonna have to trade down. You can’t have beef — you gotta have chicken,” he said.

Stocks are not the economy

Meanwhile, Wall Street has been telling a very different story. Both the S&P 500 and the Nasdaq Composite have recently climbed to fresh highs.

To Zandi, that disconnect is part of the problem.

“The stock market’s not the economy,” he said. “In my 36 years as a professional economist, the stock market’s never been more disjointed from the economy.”

He attributed much of the market’s strength to artificial intelligence, especially large tech companies.

“What’s driving the stock market train is these big hyperscalers and chip companies,” he said, adding that the AI trade “runs on its own dynamic” and “has nothing to do with the economy.”

Zandi also said investors appear to be betting that President Donald Trump will pivot if the economy or markets start to wobble.

“Stock investors are looking at the president, the president’s looking at the stock market,” he said. “That doesn’t feel like a stable… equilibrium — it’s kind of like a hall of mirrors.”

⬆︎ That's a big red flag - if you're expected Trump to behave like a normal rational human being, you're in for a rude surprise.

Zandi also warned that valuations are stretched.

“Valuations are awfully high,” he said, noting that price-to-earnings multiples are near historic highs, “except for perhaps during the internet bubble, which didn’t end so well.”

Zandi isn’t alone in sounding the alarm. Billionaire hedge fund manager Paul Tudor Jones has said that the market “feels exactly like 1999.”

Meanwhile, Warren Buffett’s Berkshire Hathaway now holds $397.4 billion in cash — a record amount that many investors interpret as a signal of caution in an expensive market (3).

To be sure, markets are inherently volatile, and no forecast is guaranteed. But with valuations stretched and recession risk elevated, now may be a good time to consider how to diversify beyond traditional stocks.

Amanda Tuesday

Here's that story on inflation:

Inflation rate projected to hit 6% in the second quarter, top economic forecasters say

• The recent surge in inflation is likely to get worse over the next several months, according to a survey Friday from the nation's top economists.
• Consumer price inflation is projected to hit 6% for the second quarter, according to the Survey of Professional Forecasters, compared with 2.7% in the prior survey.
• The survey follows a slew of inflation data showing that prices paid both at the consumer and wholesale levels hit multiyear highs in April.

The recent surge in inflation is likely to get worse over the next several months, according to a survey Friday from the nation's top economists.

Consumer price inflation is projected to hit 6% for the second quarter, according to the Survey of Professional Forecasters, a blue-ribbon group that is polled each quarter by the Federal Reserve Bank of Philadelphia.

In the most recent forecast three months ago, the panel put the expected consumer price index gain at just 2.7%. However, that was just before the U.S. and Israel launched attacks against Iran, hostilities that have sent energy prices soaring while pushing inflation data well past the 2% mark the Fed targets.

For the full year, the panel put the CPI rate at 3.5% for the all-items number and 2.9% for core, which excludes volatile food and energy prices. That's up from estimates of 2.6% for both in the prior survey.

Elevated inflation levels are expected to persist into the third quarter, with headline CPI projected at 3% and core at 2.9%. Both levels are expected to ease by the end of the year, with the fourth quarter at 2.5% and 2.7%, respectively.

Still, the panel doesn't see the Fed hitting its goal well into the future. The 10-year projected annual average is at 2.4%, which the survey notes would be equivalent to 2.22% by the Fed's preferred standard, the personal consumption expenditures price index, a Commerce Department measure.

The PCE inflation rates also are expected to hold well above the Fed's comfort zone, though at not as high a level as the consumer price index, a Bureau of Labor Statistics compilation.

Headline PCE inflation is projected at 4.5% for the second quarter with core at 3.4%, compared with prior estimates of 2.7%.

The survey follows a slew of inflation data showing that prices paid both at the consumer and wholesale levels hit multiyear highs in April. Headline CPI showed inflation at a 3.8% rate, the highest in nearly three years, while the producer price annual inflation rate of 6% was the peak since December 2022.

All of the data comes as Kevin Warsh is set to assume the role of Fed chair. Though Warsh has indicated he would like to see lower interest rates, that is going to be difficult to accomplish with inflation data so high and the general sentiment among his fellow policymakers to keep rates steady with an open mind toward possible rate hikes if inflation worsens.

Elsewhere in the survey, forecasters lowered their outlook for growth in coming quarters. They expect gross domestic product to rise at a 2.1% annualized rate in the second quarter and 2.2% for the full year, the latter down 0.3 percentage point from the prior estimate. Growth is projected to slow further to 1.9% in 2027 before bouncing back above 2% in subsequent years.

The unemployment rate this year is expected to settle around 4.5%, or 0.2 percentage point higher than the current level.

Up Up And Away

Now ain't that just won-fuckin'-derful.

Inflation spikes to 3.5 percent in March as Iran war drove prices higher

Prices grew at a far more rapid rate in March as the war in Iran drove a significant increase in inflation, according to data released Thursday by the Commerce Department.

The annual inflation rate in March rose to 3.5 percent, as measured by the personal consumption expenditures (PCE) price index, up from 2.8 percent in February. Without food and energy prices, which have spiked amid the war in Iran, the annual inflation rate last month was 3.2 percent.

Prices also jumped 0.7 percent last month alone, up from a 0.4 percent increase in February, according to the Commerce Department.

The PCE price index is the Federal Reserve’s preferred measure of inflation. The March annual inflation rate of 3.5 percent is far above the Fed’s target of 2 percent annual inflation.

The new inflation data was in line with the expectations of economists, who have warned about the steep toll the Iran war could take on the U.S. economy.

Powell out at Fed, or is he? Warsh confirmation advances as interest rates hold steady | Sunrise

President Trump and Republicans, who are already facing intense criticism over their handling of the economy, are likely to face even more pressure from the spike in price growth.

Here's Comes Trouble?

It takes about 6 weeks for an oil tanker to get from the Strait of Hormuz to a western port city.

It's been 38 days - ie: 5 weeks and 3 days - since Trump started his stupid little war with Iran on  Feb 28, which of course, was when the last tanker could've passed through the strait.

This Friday - Apr 10 - may well be the day we see the last of the middle east oil for a while.

If Trump has a sudden bout of Un-Crazy and calls the whole thing off right now, and the Iranians forget it ever happened, and the whole world lets us off the hook, we're still probably royally fucked for the next couple of months.

Since Trump is very likely never to do the smart thing, nothing good is bound to happen,

So file that under:

On the other hand:

I don't know if Mr Global is on point here - seems a little counterintuitive - but he's saying we shouldn't see a major shortage of gasoline in USAmerica Inc.

Trump's stupid little war in Iran is starting to cause - and will continue to cause - some big problems in the overall economy.

So no - we're not safe and secure. We have to be part of the world we live in. We are all interdependent economically, and we're all going to be effected no matter what - good or bad.

IT COULD GET BAD

WE'LL SEE

IT COULD BE ALRIGHT

WE'LL SEE

Warning Signs

Ominous Walmart signal that predicted last FOUR downturns flashes red again

A little-known recession warning tied to Walmart is flashing red again - and it’s spooked economists for a worrying reason.

The same signal has correctly predicted the last four major US downturns.

When shoppers start ditching designer brands and trading down to cheaper stores like Walmart, it’s often a sign that financial pressure is building beneath the surface.

Jim Paulsen, a veteran economist for more than 40 years, tracks what he calls a 'Walmart Recession Signal,' which compares Walmart stock to that of luxury fashion retailers.

As shoppers flock towards cheaper stores like Walmart and away from designer brands, the signal 'flashes red,' pointing to a recession looming nearby.

The indicator has surged to its highest level since the 2008 financial crisis. That suggests Americans are tightening their belts as fears of job losses and a recession grow.

This year alone, the indicator has jumped 28 percentage points over rising prices and the war in Iran rattled consumers, Dr Paulsen said.

Instead of splurging on premium brands, more shoppers are switching to discount essentials – a classic early warning sign that confidence is slipping.

Walmart is a major player in the discounted retail space, with over 5,000 'supercenters' in the United States alone.

As a result, Dr Paulson said choosing this chain, as opposed to Target or Walgreens, helps provide an accurate picture of lower and middle class spending habits.

'Walmart specifically caters to the lower income distribution and thereby could provide an early read on a burgeoning recession,' Dr Paulsen said.

However, according to Dr Paulsen, a sharp economic downturn shouldn't be an immediate concern for shoppers.

'My guess is the economy avoids a recession this year, but I am becoming more convinced that a significant US economic slowdown is unfolding,' Dr Paulsen wrote on Substack. He said that could mean the Federal Reserve needs to cut interest rates to boost the economy.

Retail analyst Neil Saunders of GlobalData agreed that Americans remain under pressure from higher prices, including recent gas hikes.

'This has made a lot of people look to value chains like Walmart to help them make their dollars go further,' he told the Daily Mail.

He added that middle-income consumers are 'trading away' luxury goods out of fear of spending too much.

'I would not say these are signs of an impending recession as they have actually been present for a while, but they are signs of a consumer that’s trying to cope with a cost of living crisis,' he said.

Economist Michael Szanto told the Daily Mail 'it's too early at this point' to assume that there will be a recession, 'though it's certainly possible.'

With new CEO Josh Furner in charge, Walmart has plans to upgrade the in-store experience for its growing customer base.

New digital shelf labels, which update automatically each night, will replace the old pricing system within the next year - and have sparked fears of AI-powered surge pricing.

Walmart says digital shelf label prices are still set by humans despite the updates, as around 2,300 US stores are already using the digital system.

What We All Knew

Trump's a fuckin' idiot. And anybody still supporting him is a fuckin' idiot too.

US Trade Deficit Widens, Capping One of Biggest Since 1960

The US trade deficit widened in December, capping a turbulent year of erratic tariff policy.

The goods and services trade gap expanded from the prior month to $70.3 billion, Commerce Department data showed Thursday. The shortfall culminated in a full-year deficit of $901.5 billion, still one of the largest in data back to 1960.

The December deficit reflected a 3.6% increase in the value of imports. Exports of goods and services declined 1.7%. The median estimate in a Bloomberg survey of economists called for a $55.5 billion overall shortfall.

The trade data were notably volatile in 2025 on a month-to-month basis as US importers reacted to a persistent drumbeat of tariff announcements from President Donald Trump. Gold and pharmaceutical imports were particularly choppy as companies raced to beat higher duties.

The increase in goods imports in December included gains in computer accessories and motor vehicles. The decline in exports largely reflected fewer outbound shipments of gold, according to the trade report.

The latest trade data will help economists firm up their estimates for fourth-quarter gross domestic product, which will be released on Friday. Before the figures, the Federal Reserve Bank of Atlanta’s GDPNow forecast net exports would add about 0.6 percentage point to fourth-quarter growth, now estimated at 3.6%.

After adjusting for changes in prices, which filters into the real GDP measurement, the merchandise trade deficit widened to $97.1 billion in December, the most since July. Trade in gold, unless used for industrial purposes such as in the production of jewelry, is excluded from the government’s GDP calculation.

Trump has leaned on tariffs as part of his strategy to reduce reliance on foreign goods, encourage domestic investment and correct decades of declines in manufacturing employment. He and his economic team have criticized research concluding that Americans have borne the costs of tariffs.

- and -

Hassett Attacks NY Fed for Study on Tariffs Hurting US Companies

National Economic Council Director Kevin Hassett said a study from the Federal Reserve Bank of New York showing US companies bear most of the tariff burden “is an embarrassment” and the people associated with it should be “disciplined.”

“What they’ve done is they put out a conclusion which has created a lot of news that’s highly partisan, based on analysis that wouldn’t be accepted in a first semester econ class,” Hassett said Wednesday on CNBC.

Hassett said US consumers will be made better off by tariffs.

The paper published last week by the New York Fed found that nearly 90% of the economic burden from tariffs in 2025 was borne by US companies and consumers. The New York Fed did not immediately respond to a request for comment.

Today's Belle et al

• Huge debt - and getting huger
• The deficit is growing
• Shrinkflation is accelerating
• Job growth sucks
• Mortgage foreclosures are rising
• Personal bankruptcy is rising
• Farm failures are rising
• Consumer Confidence is in the shitter
• and
• and
• and

But hey - The Epstein Class is doing just fine, so who cares about those workin' slob losers in the "middle class"? Fuck 'em if they can't take a joke.

How the hell do I short this market?

During a "shutdown", what essential services are cut, and what is kept up and running?

• The hotlines for reporting things like fraud and ID theft are taken down, but the office that handles corporate mergers and acquisitions is on the job
• Air traffic control operations for private jets may be impacted, but the commercial traffic has to be limited

40% of the gains in the stock markets is due to speculation on AI.

What Now?

They need us to be sick, broke and scared.

Today's Rich

Immigrants - people here legally are otherwise - are better for the US economy than Republicans.

And always remember, there was a workable proposal for real Immigration Reform on the table ready for Congress to take it up, haggle it out, and vote it into law in the summer of 2024, but Trump jumped in and told the dog-ass Republicans to throw it out so he'd have an issue to run on.

First, we got "They're eating the dogs - they're eating the cats."

And now we've got roving gangs of masked thugs raiding daycare centers and hanging out in Home Depot parking lots, hunting down anyone who looks a bit too brown - and killing people who pose absolutely no threat to anyone.

None of us should trust any politician too much, but damn - you can trust Republicans about as far as you can spit a bowling ball.

The Cato study:

Cato Study: Immigrants Reduced Deficits by $14.5 Trillion Since 1994

Immigrants’ Recent Effects on Government Budgets

Today, the Cato Institute published “Immigrants’ Recent Effects on Government Budgets: 1994–2023,” a study on the fiscal effects of immigrants—legal and illegal—that builds upon the National Academies of Sciences, Engineering, and Medicine (NASEM) fiscal effects model. The paper, which I coauthored with Michael Howard and Julián Salazar, is the first to analyze three decades of federal, state, and local government budgets to determine how immigrants affected the total US government debt and deficit.

In this paper, we wanted to accomplish two main things:

1) Provide the first-ever assessment of the total net fiscal effect of all immigrants from 1994 to 2023, rather than a one-year snapshot or forward-looking projection like many other studies. We wanted a sufficiently long period to assess claims like those by White House Deputy Chief of Staff Stephen Miller, asserting that immigrants have already sucked us dry.

2) Provide the clearest explanation for the mechanisms driving the fiscal effects of immigration on government budgets.

Immigrants Have Reduced the Deficit Every Year

Every year since 1994, when data collection began, immigrants have paid more in taxes than they received in benefits from the federal, state, and local governments. The fiscal benefits have continued to rise, reaching their highest level ever in 2023.

The fiscal surplus from all immigrants from 1994 to 2023 was $14.5 trillion, compared with a deficit of $48 trillion without immigrants. That means that immigrants cut deficits by nearly a third in real terms over the last three decades.

Why the Average Person Is Fiscally Positive

How can immigrants be so fiscally beneficial when the country overall is running such extreme deficits? The answer is that a big part of the US budget is pure public goods—primarily the military and interest payments on past debt accrued before the immigrants came—which don’t scale with population growth. These are essentially fixed costs or sunk obligations that the United States will have to cover whether immigrants come or not.

The figure below shows how, in most years, tax revenue exceeds the costs of providing benefits—that is, everything that requires scaling with population growth. Thus, immigrants will be fiscally positive so long as they are at least average in their revenue creation and benefits received. In fact, immigrants are significantly better than average in both aspects of the fiscal equation.

Immigrants Pay More Taxes, Receive Fewer Benefits

Immigrants pay more in taxes than the average person. This is counterintuitive because they have lower hourly wages, but because they work at much higher rates (the blue line), they end up with higher per capita incomes (the gray line) and pay more in taxes than their share of the population predicts (the dotted line). Thus, immigrants have been better at generating revenue for the government than the average person.

Are their tax revenues overwhelmed by the costs they impose? Here’s everything the federal, state, and local governments spent money on over the last 30 years in per capita dollar amounts. Immigrants did not create significantly higher costs for any items and saved the government enormously in two areas: old-age benefits and education costs.

Immigrants cost less as retirees: First, the savings on old-age benefits are not because immigrants are significantly less likely to retire. Instead, it is because they are far less likely to receive a government pension, since they were less likely to have government jobs and thus less likely to receive expensive government pensions. The main reason, though, is that they were simply barred from applying for Social Security and Medicare because they either arrived too late in life to earn the necessary qualifying work history, or they are here illegally or in a temporary status and ineligible for that reason.

Immigrants cost schools less: Immigrants arrive in the United States at the average age of about 25, meaning that the United States gets workers without having to pay to educate them. Even though they are more costly when in school—due to bilingual education needs—they are much less costly overall because they are so much less likely to be in school. The result is that immigrants cost the US education system about half as much as the US-born population.

Immigrants aren’t big welfare users. The savings on education aren’t lost in the welfare state. Immigrants are much more likely to be in poverty but use roughly an average amount of what we call “needs-based” assistance. That includes traditional welfare, food assistance, Medicaid, refundable tax credits, and unemployment insurance. The entire reason for this disconnect between poverty rates and welfare use rates is that many immigrants are here illegally and so are ineligible to apply for welfare in most states. This conclusion, that immigrants use welfare at the same rate as the US-born population, matches the Trump administration’s conclusion in 2018.

Here is the full picture of spending and taxes for immigrants from 1994 to 2023. Immigrants—legal and illegal—paid more in taxes every single year than they received in benefits, broadly defined, and the gap has grown over time.

Immigrants Don’t Cause Deficits

Here’s another way to look at our main conclusion. Immigrants accounted for 14 percent of tax revenue and 7 percent of government spending from 1994 to 2023. Even if the government had not spent a dollar on immigrants, while somehow still getting all their tax revenue, the US government at all levels would still have run a $20 trillion deficit. Immigrants are not to blame for government deficits. Indeed, they reduced the deficit by about $14.5 trillion.

We use the highest-quality data available for this report and the best methods for this type of analysis. Although there are undoubtedly methodological finer points that can be debated, these broad conclusions are inescapable:

1. The average additional person is fiscally positive because pure public goods are such a big portion of the budget.

2. Immigrants generate more tax revenue. Immigrants’ employment rates are well documented. The correlation between income and taxes is well established.

3. Immigrants use fewer benefits. The effects of status-based limits on welfare and entitlements are clearly apparent in numerous data sources. The savings from education are indisputable, as immigrants are less likely to be enrolled in school.

Since these effects are not driven by the absence of immigrant retirees, we shouldn’t expect our conclusion to reverse after tracking a specific cohort of immigrants over time. Indeed, when we do follow the cohort that entered from 1990 to 1993, we find that after three decades, the cohort was still paying far more in taxes than they received in benefits, and that the fiscal gains had grown over time. In total, this cohort reduced the deficit by $1.7 trillion.

Our paper also concludes:

• Without the contributions of immigrants, public debt at all levels would already be above 200 percent of US GDP—nearly twice the 2023 level and a threshold some analysts believe would trigger a debt crisis.
• Even low-skilled immigrants—those without bachelor’s degrees—reduced the debt by $2.8 trillion.
• Immigrants in all categories of educational attainment, including high school dropouts, lowered the ratio of deficit to gross domestic product (GDP) during the 30-year period.
• Illegal immigrants likely reduced the deficit by at least $1.7 trillion.
• Even including the second generation, who are mostly still children who will become taxpayers soon, the fiscal effect of immigration was positive every year, reducing the debt by $7.9 trillion.

Table: Fiscal flows and GDP effect by citizenship and education, cumulative, 1994–2023 

Concluding Thoughts

Overall, the main conclusion of our paper is that there is nothing systematically wrong with US immigration policy regarding the fiscal effects of immigrants. There is nothing unsustainable about the US immigration system. We could have scaled immigration as it existed without burdening government budgets. For years, nativists in Congress and the administration have wrongly claimed that immigrants are behind the growth in debt and that the US immigration system allows foreigners to take advantage of Americans’ generosity. Our data completely repudiates this view. Immigrants are subsidizing the US government.

The best way to balance the budget is to reduce spending—particularly on wealthy retirees—but rather than hinder our efforts to control deficits, immigrants are helping.

You can read the entire study here: Immigrants’ Recent Effects on Government Budgets: 1994–2023

Today's Belle

Conference Board Consumer Confidence numbers are pretty bad - again.

All 5 categories are down - the lowest they've been since 2014.

Overall confidence has been under 80 for a full year, with only 15.6% of the people expecting the economy to improve in the next 6 months.

Latest Press Release
Updated: Tuesday, January 27, 2026

Confidence collapsed to lowest point since 2014, surpassing pandemic depths

The Conference Board Consumer Confidence Index® fell by 9.7 points in January to 84.5 (1985=100), from an upwardly revised 94.2 in December. A 5.1-point upward revision to December’s reading of the Index resulted in a slight increase last month, reversing the initially reported decline. However, January’s preliminary results showed confidence resumed declining after a one-month uptick.

The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—dropped by 9.9 points to 113.7 in January. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—fell by 9.5 points to 65.1, well below the threshold of 80 that usually signals a recession ahead. The cutoff for preliminary results was January 16, 2026.

- more -

GOLDEN AGE MY ASS

Jessica

• Trump's tariffs have cost every American household $1,100.00
• Wage-earners are getting a smaller portion of GDP than they have since 1947, when we first started tracking it
• Under Trump - for 8 straight months since his tariffs started - we've lost manufacturing jobs - every fucking month
• In 2025, a total of 584,000 new jobs have been added (the lowest since the Great Recession), which is almost a million jobs below what we need to stay even
• 94% of the costs of Trump tariffs have been paid by American companies, who are passing that shit on to us - have you checked your shrinkflation lately?
• US food prices are up 19% since 2022
• Energy prices are going up for normal people, but not for the big data centers

Today's Rich

K-Shaped Vibe-cession

The good old 401k and IRA are rollin' along singin' a song.

And that alone would generally tell us things are OK, but we've learned over the last several years that good-looking markets for stocks and bonds aren't really a solidly accurate gauge for how most people are actually doing.

If you had some money to get into the markets in the first place, then it's not so bad, but the picture is pretty bleak for practically anybody pulling down less than $100-200K, which is about 80% of the American workforce.

Home-sellers outnumber home-buyers by a margin that's either bigger than ever, or bigger than it's been in 30 or 40 years.

And all of this controversy and argument over what numbers are more accurate can be laid directly at the feet of "President" Trump.

Nothing is as it seems - except of course that Trump is lying to us.

GDP 'Nowhere Near' 4.3%: Rosenberg Dismisses Q3 Report As 'Fugazi,' Pegs Real Growth At 0.8%

While the U.S. Bureau of Economic Analysis (BEA) reported a robust 4.3% annual increase in third-quarter real gross domestic product (GDP) on Tuesday, economist David Rosenberg is calling the headline number a “fugazi.”

The ‘Fugazi’ Factor

The president of Rosenberg Research argues that underlying economic weakness is being masked by government spending and depleted savings, calculating “true” growth at a meager 0.8%.

The official BEA release shows widespread gains, with real GDP accelerating from 3.8% in the second quarter to 4.3% in the third. The increase was driven primarily by consumer spending, exports, and government spending.

However, Rosenberg contends these figures are misleading. “If you think the CPI data was manipulated, so was today's GDP report,” Rosenberg stated on X.

He argues that once government spending, shifting import data, and a “sharp drawdown” in the personal savings rate are stripped away, the economy is barely expanding. He specifically points to “flat personal disposable income growth” as a critical red flag contradicting the apparent consumption boom.

Clash Of Narratives: Weakness Vs. Overheating

The report has sparked fierce debate among analysts interpreting the same data through vastly different lenses. While Rosenberg sees a hollow economy propped up by unsustainable spending, Gordon Johnson of GLJ Research sees a terrifying nominal boom.

Johnson highlights that nominal GDP (growth before adjusting for inflation) surged 8.2%, accompanied by a GDP price index reading of 3.8%—far hotter than the Fed’s target.

“Nominal growth in the U.S. is >8%… yet 10yr yields are AT JUST 4.17%?” Johnson questioned, arguing that the Federal Reserve's current easing cycle is “encouraging EVEN MORE inflation” in an economy that is overheating, not cooling.

Inside The Q3 GDP Numbers

The official data support elements of both bearish views. The BEA confirmed that imports, which subtract from GDP, decreased, artificially boosting the headline number.

Meanwhile, the price index for gross domestic purchases accelerated to 3.4%, up from 2.0% in the previous quarter, lending credence to Johnson's inflation fears.

As markets digest the report, investors are left with a stark choice: believe the headline strength, Rosenberg's “fugazi” weakness, or Johnson's inflationary fire.

Food Is Life

20,000 independent American farmers will go broke this year - and that probably won't change next year. Or the next.

Hawk

This is not winning.

Think Outloud

Operative Concept:

MAGA voters are willing to go down with the ship as long as they're convinced someone they don't like is going to drown faster and harder.

People keep telling me not to take it out on the MAGA voters, but I'm not hearing a good explanation for how these people continue to buy into the bullshit when better information and - you know, factual reality - are both in their faces every fucking day.

Year-To-Date, AI accounts for 40% of GDP growth, and 80% of the stock market rise.

Expertise is not Elitism

Education is not Brainwashing

Warnings are not Fear Tactics