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

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Three huge sectors — housing, healthcare and education — are getting more expensive without a corresponding increase in quality

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If you want to know what happened to consumer spending and the economy, this is where the money went. Government involvement in housing (Section 8, FHA loans, interest rate manipulation, subprime lending, ect) have driven up prices by distortig the market in a very big way. Involvement in education (forced bussing, teacher's unions, federally insured student loans, pell grants, ect) have caused costs to spiral out of control. Healthcare is the same. More government involvement means increasingly higher prices.

The farther removed the consumer of a service is from the one who pays the costs of said consumption, the more price inelastic they will be. Because so many who use healthcare, education, and housing are not paying out of pocket for the vast majority of the cost (at least up front), costs are allowed to raise without the demand for the service dropping. Government, the working poor, the middle class, and the wealthy absorb the higher costs so the poor can continue to use these services for free.