How Americans Feel About The Economy / Taking America's Pulse

Buying Is Easy-Paying Is Hard!

A great deal of how we feel about the economy is usually based on what we hear and see. For much of America it simply comes down to has your child just lost or found a job and then issues such as what is the pay and their prospects going forward. Compounding the employment problem is trends in the type of jobs being created have not been favorable, many of them pay little and are only part-time positions. The issue of healthcare is also front and center, meaning how much will you have to pay and how will you and those in your family be affected as policy prices soar far faster than wages or inflation. To complicate matters our feeling can be temporarily skewed by the purchase of a new car or home that we may or may not be able to afford.

An Inconvenient Truth

The Fed's inability to get the economy off the bottom has been twisted into a "they are doing their best" story in the wake of difficult problems with a "we are better off than we were" spin. Many people have ignored how poisonous low-interest rates have hurt savers and how easy money has spurred poor allocation of capital. Adding to this confusion is that we should embrace a short-term economic prop that results from the Republican's almost jubilant capitulation on the recent budget deal. The general consensus is that the Republicans were in the unenviable position of being politically dammed for any pullback in the economy and would pay a huge price in the upcoming presidential election if they held fast and hard to cut spending. Sadly, while propping up spending this will only add to the exploding national debt.

Decades of overspending, undersaving, offshoring our jobs and a slew of bad habits coupled with bad policies have brought us to where we are today. It is easy to make promises, and we have made many, but the tough part is keeping them. It is hard to ignore that other than a very short-term stimulus or a temporary prop artificially low-interest rates have some rather bad and damaging side effects, if that were not true they would be the norm. In November of 2014, the national debt was poised to pass the 18 trillion mark. As of now, the National Debt Clock shows 777 billion dollars has been added to the total and the amount owed continues to grow. Ironically a big part of the discussion in both Democrat and the Republican presidential debates centers around growing inequality and jobs supporting the very important middle-class lifestyle that propels this county forward. As candidates elbowed each other aside to take credit for our few victories they made even greater efforts to distance themselves from the many failures.

Adding to the confusion is that some of the numbers put out there for us to absorb are somewhat questionable and based on facts or assumptions that carry rather negative implications. A MarketWatch reader who I will identify as JB commented recently;  "I counsel a lot of people who are out of their careers and have a family and can not find work. Many are taking out their pensions to live off of because they can not find work. That is going to be the next big crisis is all the people laid off or unemployed taking out their pensions."  It appears to me this is a big reason the labor participation rate should be front and center as well as the quality of the jobs being created. It is clear this does not paint a picture of a bountiful future.

Consider this a vivid reminder that success has many fathers and failure is an orphan, but at the end of the day we are left with reality, and as of late it is not a beautiful thing. To those who think all is well I would like to remind them of the old saying, "you can't tell a book by its cover". This means those with an agenda will go to extremes to spin news such as the recent job numbers, but what we are told could be wrong. When we delve a little deeper into the story of our economy sadly, we find it is not a tale of redemption and growth but a horror story based on deceit. The average American is not reading these words because they really don't care or prefer not to know about the problems we face. Timing is another issue, and it seems never a good time to bring up the bad news. This is why the masses often react with surprise and shock when reality raises its ugly head.