U.S. Economy - No Recovery since 2007 - Gallup

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Raising the quality of goods and services relative to their costs is the fundamental source of growth.

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GDP IS INCOME In fact, the relationship between GDP and household income is more than an analogy. GDP can be defined as “gross domestic income,” which is the summation of worker compensation and the income of business owners (profits, dividends, etc.).21 GDP, therefore, is income. And GDP per capita is average income per person. That’s why its growth is fundamental to the wellbeing of residents, even if well-being includes many aspects of life not directly captured by GDP or household income.22

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The only way to achieve high productivity, or GDP per capita, is through high-productivity growth. Human societies have never achieved sudden bursts of sustainable affluence. Most ancient prosperity, which was still quite low compared with today’s living standards, was achieved through extracting resources from other societies or slaves, not through efficient production.24 Humans were collectively quite poor until the Industrial Revolution ushered in growth that gradually — over centuries — transformed the productive capacity of societies

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n standard macroeconomics, growth comes from positive technological change. Technological change is often described as the production of more things (such as industrial machines or cars) at the same or even cheaper costs, measured by the number of hours worked or other inputs. Yet, technological change is fundamentally an increase in the ratio of product quality to the cost of its production and distribution. If an entrepreneur or inventor implements a cheaper way to produce more goods or services of the same quality, then this results in an increase in the quality-to-cost ratio, and it will raise growth. Likewise, when a product is introduced to the market at high relative quality at similar costs, living standards increase. Smartphones, for example, accomplish many tasks previously performed by other devices, such as personal computers, standalone GPS systems, watches, landline telephone services, video game consoles and televisions. These qualities make the quality-to-cost ratio of a smartphone extremely high, allowing them to raise living standards, even if they lower demand for these other products. Along these lines, the growth of business revenue only increases GDP per capita if its product enhances the quality-to-product ratio. Otherwise, the business is only taking market share, and the product does not make the world richer, but reshuffles income away from other businesses that had been competing for consumer, business or government spending.

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Three huge sectors — housing, healthcare and education — are getting more expensive without a corresponding increase in quality, and these are the focus of this report. Just as product enhancement increases productivity growth and living standards, its opposite — deterioration, meaning cost increases that exceed quality improvements — directly lowers living standards. On balance, the economy has expanded in recent decades, but it has done so much less rapidly than it could have as a result of weakness in these sectors.

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The contribution of healthcare, housing and education to measured inflation since 1980 is OVER 50%

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Here, the focus is on the key period between 1980 and 2015 when the slowdown in GDP growth per capita began. Over this period, private and public spending on housing, healthcare and education soared, and these sectors absorbed a larger share of GDP, going from an already substantial 25% to an enormous 36%. Of these, healthcare saw the largest jump, increasing from 9% to 18%.

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Inflation data show that the spending increases in healthcare, housing and education relate to rising prices and not simply a shift in spending across service categories.

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Education is 8.9 times more expensive in 2015 than in 1980. Within education, higher education specifically is 11.1 times more expensive. Healthcare costs 4.8 times more than it did in 1980, medical insurance costs 8.7 times more and housing 3.5 times more. Thus, the shift in spending toward education, healthcare and housing cannot only reflect increased demand. At a per-unit level, prices have also increased, driving up the share of spending on these products. This suggests that something is holding back supply.

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End. The. Fed.

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If he can get the corporate tax lowered, repeal Obamacare, lessen regulation, and put a hiring freeze on Fed employees, he might go down as the next Ronald Reagan

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Self-reported health status fell for people ages 25 to 59 between 1990 and 2015.

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28% Share of income spent on rent for a typical family in 2014, up from 19% in 1980.

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1971 Year of peak literacy for 17-year-old Americans.

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Health insurance as a share of worker compensation increased from 4.5% to 8.1% from 1980 to 2015.

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DECLINING LABOR FORCE PARTICIPATION From 1962 to its peak in 1998, labor force participation for the working-age population (aged 18 to 64) increased dramatically from 66.3% to 79.0% as social barriers to female labor fell. Over that same period, men gradually started working less, but the gains for women more than offset this. Yet, after 1998, even the positive trend for women reversed itself, and since then, the share of working-age women who were out of the labor force increased from 28% to 31% along with the share of men, which continued to increase from 14% to 19%

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As described previously, one can attribute much of this trend to the declining health status of working-age men and women. In fact, comparing responses to the 1980 Current Population Survey with responses in 2015, the percentage of people who are ill or disabled represents, by far, the single largest categorical increase for why people are not working.

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As described previously, one can attribute much of this trend to the declining health status of working-age men and women. In fact, comparing responses to the 1980 Current Population Survey with responses in 2015, the percentage of people who are ill or disabled represents, by far, the single largest categorical increase for why people are not working.90 But in 1980, the share who were out of the labor force for family reasons was still high and falling. It may be more instructive to see what happens just after peak labor force participation in 2000. Among those out of the labor force during the previous week, from 2000 to 2015, 34% of the increase in nonparticipation among those aged 18 to 64 is explained by health, 29% by more people going to school, 16% from early-retirement, and 5% by people reporting they could not find work. Thus, the dominant reason given for why people are working less is poor health.

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Many companies are devising strategies to minimize or avoid these giant healthcare costs by relying more heavily on part-time workers or contractual workers. The share of workers in temporary, contractual or on-call relationships with employers increased from 10% to 16% from 2005 to 2015.92 Over this same period, the percentage of workers in part-time jobs who would prefer full-time employment increased from 6% to 8.8%. The spike in involuntary part-time work from 2008 to 2009 and 2010 may be related to the Great Recession, but it has remained high even during the recovery. It may be that the Affordable Care Act, passed in early 2010, is playing a role, since it penalizes employers with at least 50 workers for not providing healthcare coverage for full-time employees, giving employers an incentive to reduce full-time opportunities. Less than half of involuntary part-time workers (44%) are covered by their employers, compared with 78% of full-time workers.

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Provisions in the Affordable Care Act were designed to make it easier for the self-employed to purchase health insurance, but even in 2014, 23% of self-employed workers between the ages of 18 and 64 lacked health insurance, compared with 13% of wage and salary workers. For those who are self-employed and have insurance, only about half get it through their businesses.93

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Whatever the reasons, people are much less likely to either be selfemployed or start firms with at least one employee. The number of new firms with at least one worker per capita has fallen by about half since the late 1970s. Although the downward trend has been going on for decades, it accelerated over the Great Recession and has not inched back up.

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Since 1981, the annual costs of federal regulations have increased by an estimated $250 BILLION

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I would think that "entitlements" are a bigger problem than those 3 items.

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