The Government created the bifurcation of the American Economy

This may seem a bit harsh, but I believe that during Covid and the stimulus that was created to "save" the economy, the bifurcation of the US economy deepened.

The stimulus created lots of checks going out:

to pay people not to work

help pay rent

pay for people who had kids to support them

For a small moment in time (about a year) those at the bottom of the financial pyramid felt what it was like to have a little cushion in their lives.

However, this put the economy on the path to where we are today with high Inflation.

This extra money chasing the same(or reduced amount of goods) has led to a run up in prices.  {we will not go into gas prices here as that has a separate set of issues}

And at the same time when prices were rising, the FED and the US Government had to "take away the punch bowl" to stop inflation.

This has put those at the bottom of the pyramid in a very difficult situation.  They were just getting used to having that cushion and now it is gone.

The economy seems to be doing just fine, people are going out to eat, flying around the country and have jobs (lowest unemployment in a long time, if not ever)

But normal people are struggling.

This is the Bifurcation.  We have 2 economies, RICH and POOR and it is not good.

Add to that, the low interest rate environment allowed a lot of people to do very well and set themselves up during Covid.

Where will they stop their spending?

Walmart says that they are buying cheaper lunch meats and 1/2 gallons of milk.  Gap, Target, Kohl's are having trouble.  People at the bottom are reducing their spending and they are in a world of hurt.

Landlords be wary as they are going to have a tough time paying their rents.  Especially those rents that are up over 30% in the last couple of years.

If you have to pay $5/Gallon Gas, and increased food prices, it is hard to have $$$ "left over" for rent.

Hopefully the economy will cool off and prices will mitigate, or else the Government will feel that they are once again "forced" to help.

Remember "Nothing is so permanent as a temporary government program" - Milton Friedman