Louis c on democraticunderground posted this succinct look at the US economy Thursday:
Let’s get something straight; The Economy is Not Doing That Well
“First off, the economy is proceeding with an improved GDP for only a quarter. The average person doesn’t live by the GDP numbers, they live by their own income numbers. The real wage growth is minus .2% (inflation is 2.9%, wage growth is 2.7%). And, that 2.7% wage growth is centered mostly in the urban centers of this country. Trump’s voters are seeing very little of that 2.7% and are being hurt the most by tariffs, especially in the rural counties of America. Trump country.
I remember that Trump said he would balance the budget. Yet his military spending and tax cuts for the wealthy have increased the deficit by $300 billion annually to $800 Billion, and is expected to exceed $1 trillion by the end of the year.
Although the stock market his increased, 60% of Americans don’t own stocks and the market only affects the average American if it crashes. The trade deficit is up, farmers are on edge, retail stores are closing down and the only beneficiaries of the huge, deficit ballooning tax cuts, are the very wealthy. By the way, where was the increase in the carry trade tax on the real parasites on Wall St.?
Unemployment may be down, but where are the good jobs? The reason the Republicans can’t get any political traction from the economy is that there is no benefit to the average worker (unless they work in a union with a collective bargaining agreement, and that’s down to 7% of the workforce in the private sector).
If the Republicans think the economy will save them in the mid-terms, they are sadly mistaken. The real numbers, the numbers that the average American sees in his or her paycheck, that number is not good. And with the increase in the cost of health care deductions, the average worker is worse off now than they were 2 years ago.”
This is a short and pretty realistic look at the economy at the moment.
As the administration was celebrating a good GDP growth last quarter, many were quick to point out that those numbers were inflated by countries making purchases before the tariffs kicked in. We will have that to look forward to next quarter plus the beginning effects of the tariffs on farm products here in Iowa.
So the GDP numbers are misleading, real wages are declining, the stock market is booming but it is being artificially fueled by stock buy backs paid for by the huge corporate tax cuts and good jobs at decent wages are still not in the picture for the average worker.
Let’s add one more bit of data to the mix – consumer debt is rising and may be poised to reach an all time high of $4trillion by the end of the year. This means that Americans owe @26% of their annual income to debt. From CNBC’s website:
- Consumer debt has grown since 2012 and is poised to reach a new high by the end of this year.
- Individuals are spending about 10 percent of their income each month paying nonmortgage debts including auto loans, credit cards, personal and student loans.
- You should evaluate three key areas when thinking about managing these balances.
While their analysis doesn’t seem to indicate any red flares right now, I would caution that much of this debt is being accrued by the same workers who are seeing their real wages decrease. While the flares aren’t up yet, keep your eyes open.
Sure seems like we have been down this road before – good economy for the rich, other people are at best treading water and some are going under. Seems like we go down this same road every damn time we are foolish enough to put Republicans in charge of something as important as the economy.