By NICK GOSNELL
Hutch Post
HUTCHINSON, Kan. — Creighton University economist Ernie Goss notes that there is some good news for the rural economy in what has happened recently with prices overall.
"A little bit of inflation is not bad for agriculture," Goss said. "We're seeing that, again, having some real positive impacts. We asked the bank CEOs about, for example, farmland prices. Growth over the last 12 months is 5.8%. They expect the next 12 months at 2.4%. Their outlook is for at least slower growth in the few months ahead for the agricultural sector."
Between the extended unemployment benefits and the advance on child tax credits that some have received starting this week, Goss sees that as a negative for employment and potentially for the economy as a whole.
"We're now incentivizing non work," Goss said. "Right now, you've got the federal government spending this money, overspending. You've got the federal reserve with the pedal to the metal, record low interest rates. All that's going to combine to push up inflationary pressures and what Powell calls transitory becomes permanent."
Goss also isn't confident that the budget deal that Democrats are likely to push with or without Republican support will be a growth strategy for the economy at large.
"We're talking about the government, the federal government, spending 25% of GDP," Goss said. "That's a record level. The economy just cannot support that level of spending, long term. That's going to be resulting in three outcomes, one of three outcomes, or all three. Excessive inflation, higher interest rates and or higher taxes. The government has got to pull back. You cannot continue to spend at this level and not see some real negative outcomes."
Despite recent solid job gains, U.S. Bureau of Labor Statistics data indicate that the Rural Mainstreet nonfarm employment remains 1.3% below its pre-COVID-19 level across the Midwest.