JTFMax OP

Little history:

From 1924 to 1929, Germany experienced a time of economic prosperity often called the "Golden Age." This era was characterized by rapid industrial growth, supported by a new welfare system to address social needs. Moreover, the restoration of foreign trade and large American loans also played a critical role in driving the country's economic growth during this time.

The "Golden Age" economic boom significantly impacted different segments of German society. Industrial and blue-collar workers, for instance, saw their wages rise steeply, which helped to improve their standard of living. In contrast, the middle classes, such as managers, bureaucrats, clerks, and bankers, did not benefit much from the period of prosperity.

However, the Republic was under constant pressure from extreme right-wing and left-wing extremists. On the one hand, the radical left accused the ruling Social Democrats of betraying the ideals of the workers' movement by preventing a communist revolution. On the other hand, right-wingers, especially certain members of the former officer corps, fought against democracy and blamed an alleged conspiracy of Socialists and Jews for Germany's defeat in World War I.

Besides, hyperinflation also ravaged the economy during this period. People lost their life savings, and businesses collapsed due to the massive increase in the money supply, which eroded the actual value of local currency while fueling price increases on imports. This catastrophic event severely impacted German society and contributed to the country's political instability in the years to come.

Is the US Economy in 2023/24 Similar to the German Weimar Republic in 1924?

With unemployment at historically low levels, robust consumer spending, and solid growth in business investment driving the second quarter of 2023 real GDP well above its estimated potential pace, there are few signs of an impending recession. However, several headwinds threaten to derail the soft landing toward which the economy is currently edging.

High inflation is weighing heavily on household finances, with a recent Gallup survey showing that half of U.S. adults now say their financial situations are worse than a year ago. In addition, rising mortgage rates and elevated home prices are dampening new home sales. The slowdown in global economic activity could eventually erode demand for U.S. exports and add to downward price pressures if supply chains are disrupted.

The latest numbers suggest that these pressures may be easing. For example, the latest monthly reading on core non-housing services inflation slowed significantly from its first-quarter peak to roughly one-fourth of that rate. Upstream price pressures, as measured by producer and import prices, have also slowed since early 2022.

This has contributed to the growing confidence that a recession will not arrive this year, even as many analysts revise their forecasts for 2023 GDP and employment growth. Moreover, some critical data at the beginning of the third quarter have bolstered this view. For instance, nonfarm payrolls jumped by 339,000 in May, far more than any significant forecaster expected.

"But the giant elephant in the room is the outcome of the Hamas-Israeli war in progress, which could kill the world economy with high fuel prices and food shortages."

 

What Will Happen in the 2024 Election Year?

As the 2024 election year gets underway, voters can expect the two parties to battle over a dwindling roster of states that could be key in determining who occupies the Oval Office. The nonpartisan Cook Political Report recently tabbed just four states as genuine toss-ups while identifying another three as leaning toward one party or the other.

The Republican nomination contest begins in January with the Iowa caucuses, followed by New Hampshire and South Carolina. These contests allocate convention delegates who will vote at the party's national convention in July.

Democrats are expected to nominate Joe Biden as their presidential candidate. The former vice president is a popular figure suited to appeal to centrists. His biggest obstacle will be overcoming Trump's widening unpopularity among Democratic and independent voters. The president's relentless attacks on the press and a resurgent denialist right will likely fuel anger among many voters.

The economy is a significant issue, with voters worried about inflation and economic downturn. Biden will be battling to convince voters that the US economy is on the rebound. Still, he's likely to need help to win over voters who are pessimistic about their financial prospects.

The Senate will also be a battleground in 2024, with seven seats up in states that Trump won in 2016 or 2020. The remaining seats will be in more competitive districts or safer for either party.