Economic Red Herrings
America has the best economy in the world. It is outpacing China’s growth for the first time in almost 50 years, and we avoided a recession when several of our peer nations have not.
Inflation is down to a historical average. Wages have been growing faster than inflation for over a year. Average grocery prices have been falling for four months, and gas prices are now falling too.
Unemployment has been low for a historic amount of time, staying at or below 4% for 30 months. 15 million jobs have been created. There have been three continuous years of record-breaking new small business applications. And stock markets have broken record highs multiple times.
Households even have more money to spend than they did before the pandemic. An analysis of the prices in Q3 of 2019 and Q3 of 2023 found that a median worker who bought the same items: such as food, transportation, household expenses, travel, healthcare, clothes, and more, would have had $1000 more in Q3 of 2023 than they did in 2019. Since then, wages have continually outpaced inflation.
That is why it isn’t surprising that the majority of Americans rate their own finances as good, and over 70% expect their finances to improve over the next year.
Even the World Bank says that the entire global outlook is better because of how well America’s economy is doing: “U.S. dynamism, in fact, is one reason the global economy enjoys some upside potential over the next two years,” - World Bank chief economist Indermit Gill
So why are so many Americans viewing the best economy in the world as a bad thing?
Topics such as inflation rate, wage growth, unemployment rate, labor participation rate, consumer confidence, and other technical measures aren’t used by most Americans on a regular basis.
Whereas prices of groceries and gas are front and center every week. When your grocery bill grows larger, and it costs more to fill your tank during your daily commute, you grumble about what is happening in the country. What you don’t do is stop to think about other prices that may have lowered, such as clothing and healthcare, or think about price increases compared to your recent pay raise.
It also doesn’t matter to most people that prices increased more in other nations, especially the price of gasoline. Europe had to deal with exceptionally high gas prices, but the US saw a much lower increase due to our historic oil production. In fact, American oil exports were so high that they kept global prices from going even higher.
Most Americans misunderstood post-pandemic inflation. It was a global issue, not a local one, and no nation handled the inflation and pandemic recovery better than the US.
There are several other data points people are using to discuss the US economy, even though they tell us nothing about the economy, such as how many Americans are living paycheck to paycheck. This article discusses how 78% of Americans were living paycheck to paycheck in 2023:
https://www.forbes.com/advisor/banking/living-paycheck-to-paycheck-statistics-2024/
But here is the same publication posting that in 2017 78% of Americans were living paycheck.
Then there is the conversation about Americans having more credit card debt than ever before, a headline that happens on a regular basis. While it may seem counterintuitive, US credit card debt typically only decreases when times are especially bad, such as during the 2008 financial crisis and when the Covid pandemic hit in 2020.
You can also find articles from all different years, presidencies, and congressional majorities that discuss how Americans have almost no savings or retirement funds.
None of those refer to the current economic climate in America; they all refer to how American society operates.
We are a nation that lives beyond our means and takes on debt. Part of that is because we are such a wealthy and powerful nation that we expect the future to cover our debts of today. This is exactly what makes Americans so susceptible to worrying economic news and an uncertain future. Republicans have preyed on this for years now, denying what the true state of the economy is to make Americans afraid and desperate for change.
The other reason our nation is so big on spending instead of saving is that we are a consumer-driven economy. Personal consumption expenses account for almost 70% of America’s GDP.
One reason the US economy is so strong while other nations have lagged behind or even entered recessions is that Americans continued to spend through high inflation. We continued to purchase entertainment, go out to eat, and buy more clothes, electronics, and household goods.
While that spending was good for the economy, it also led companies to realize they could raise prices more than they needed to generate record-breaking profits, which is exactly what many companies did.
Corporate greed didn’t start the inflation, but it did take advantage of it. That is a significant reason why grocery and gas prices were so stubbornly high. But now, companies are finally getting back to competing for business by lowering their prices.
All of this is good news, on top of the US's already great economic position. As grocery and gas prices continue to come down while wages continue to go up, Americans will feel better about the economy and will be more open to seeing how well our nation is truly doing.
However, having a strong economy doesn’t mean there isn’t more we should be doing. Four percent of the population is still unemployed, which is millions of people. 38 million Americans live in poverty, and over 41 million rely on federal food assistance to feed themselves and their families.
Biden and Democrats should be discussing how great the US economy is while also announcing how they will use a future majority to work towards a federal basic income program, guaranteed housing, universal healthcare, a federal job training program, and ensuring all Americans have access to nutritious food.
That is what is missing from the campaign messages. We hear about the very real threats to our Democracy from Trump and MAGA politicians. We hear about how many jobs were created, how low unemployment is, and how well manufacturing is doing in America. But what we hear very little about are concrete plans Democrats are looking to implement over the next four years.
It is time to inspire hope and confidence in where the country is headed instead of only focusing on the threat that Trump represents.
