October 24, 2019
To The Eagle:
Many are so committed to their political leanings that they can’t accept reality, and just regurgitate comfortable tweets. Without even mentioning misinformation about the border points, trade, or foreign policy, let’s look at the supposed “soaring economy” issues we hear about.
Yes, unemployment is low, but unemployment stats are a “rear view mirror” way of looking at the economy. Consider forward looking metrics such as: Private sector wages - dropping; Retail employment - dropping (remember, consumer spending is 70% of US GDP); Manufacturing employment - dropping; Hours worked/week - dropping.
QE - the US Treasury had urgently started to buy $60 billion a month of T-Bills to stabilize interest rate markets and banks’ overnight funding problems. We have very limited debt liquidity.
Average hourly earnings growth - only 1.7 percent over inflation. As well, recent inflation data (CPI) does not have tariff impacts included, so earnings growth are essentially zero. This is brutal considering how much debt we’re incurring, and on an ongoing basis.
GDP - is barely at 2.0 percent annualized and falling. That’s average at best by historical standards, and clearly not “soaring.”
Our annual budget deficit is approximately $1.5 trillion (with a T) and total overall annual debt has now surpassed 100 percent of our annual GDP. This will eventually put huge pressures on both our dollar, inflation and national credit rating.
Our new tax laws’ reducing corporate tax rates have proven to mainly increase stock buy backs and increase dividends. Yes, this has helped me too, but it hasn’t trickled down to help the overall economy as Gary Cohen, Trump’s economic advisor falsely claimed. How many out there have big investment portfolios to benefit from these huge Capital Gain and dividend tax incentives?
Our new tax laws have not increased repatriation of overseas profits to help offset the huge budget deficiencies, as promised by the same Gary Cohen. In fact, approx 60+ percent are still being held offshore. I don’t blame these companies for keeping them away from Steve Mnuchin and the treasury, considering how capricious our president is.
Our accumulated national debt, excluding Social Security, Medicare and Medicaid liabilities, has recently grown to almost $23 trillion (with a T).
Our overall debt, including all unfunded liabilities is now over $100 trillion (with a T).
Remember, our GDP is only approximately $23 trillion. As a comparison, this is like a person being in debt a million dollars with interest charges mounting daily, yet only making $230,000 a year, but still regularly spending $245,000 a year on expenses, that keep increasing annually.
Do the math. Does this sound like a soaring economy to you? To me, this sounds like present day, reckless spending to make a political party look good, but is a financial disaster that our children, and especially grandchildren, will need to deal with. What has currently benefited many of us will be paid for and borne out by future generations. This is just flat out wrong.
Our economy is clearly not soaring, and the world isn’t flat.