Incomes down for 5th consecutive year

Incomes down for 5th consecutive year

Unemployment march, depression, wikimediaA new report confirms a theme we've advanced here at CalWatchDog.com: There has been no economic “recovery.” From the Financial Times:

“The typical American family now earns less in real terms than in 1989 after household incomes fell for the fifth consecutive year, highlighting how the sluggish recovery is crimping spending power even as the US Federal Reserve considers slowing its monetary stimulus.

“The economic recovery’s failure to deliver any gains to middle America underscores the continuing challenge for the Fed, which will on Wednesday decide whether to reduce its asset purchase from $85bn a month.”

Actually, it confirms the Fed's 12-year assault on the economy through increasing inflation and keeping interest rates at zero percent, preventing the middle class from earning interest on its savings. More of the same only will make things worse.

Basically, since Reagan left office in 1989, the economy has underperformed. His policies: cut taxes, cut regulations, no inflation. (He allowed too much spending, leading to deficits; but three out of four good policies ain't bad.)

“The figures will also add to pressure from the left for Barack Obama to appoint Janet Yellen – widely regarded as one of the policy makers most concerned about high unemployment – as the next Fed chair. Mr Obama has made median incomes one of the signature issues of his presidency.”

But she's an even bigger inflationist than current Fed boss Ben Bernanke, so she would make things even worse.

According to the Census Bureau, the median household income fell from $51,100 to $51,017 in 2012, and is now 8.3 per cent below its pre-recession peak in 2007.

“The annual Census Bureau figures demonstrate what has gradually become a lost generation for the American middle class. “Poverty is higher today than it was in 2000 and household incomes are lower,” said Sheldon Danziger, president of the Russell Sage Foundation, which funds social science research.

“Mr Danziger warned the country would face “two lost decades” if federal spending cuts and slow progress in cutting unemployment continue to erode incomes.”

Actually, it's federal spending that's too high — so high it's eating into the very marrow of our economic existence — that's a major part of the problem. Since World War II, spending by the federal government never has exceeded 20 percent for long. But under Bush-Obama, spending has soared above 24 percent.

Federal receipts and outlays'

It's the spending that's too high. It's the spending that's choking the economy. And it's the spending that inevitably will come down because the backs of American workers are breaking under its burden.

Reagan showed everybody how to produce prosperity. But nobody follows him, including even his fellow Republicans: the Bushes, Dole, McCain, Bernanke, Greenspan, Romney, et al.

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That will change because Americans will not tolerate the Bush-Obama-Greenspan-Bernanke Depression continuing much longer.

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Tags assigned to this article:
economyJohn Seilermedian incomeRonald ReaganTaxes

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