Reply
 
Thread Tools Display Modes
  #1  
Old 05-04-2019, 04:09 PM
Velocity is online now
Guest
 
Join Date: Jun 2014
Posts: 14,033

Objectively, how good is the U.S. economy right now?


Suppose we completely ignore Trump in this thread - pretend it were President Hillary in the White House or someone else, but with the exact same economic data (Dow Jones above 26,000, unemployment below 4 percent)......how good or bad is the U.S. economy right now?


Without a doubt, there are still "millions of Americans somewhere who are still suffering or not truly benefiting from the economy" - but that would always be the case no matter what. Is this a "truly" good economy or is it a mirage?

On an A-F grading scale, are we in an A- economy at the moment? B+?
  #2  
Old 05-04-2019, 05:47 PM
Sam Stone is offline
Member
 
Join Date: Jun 1999
Posts: 27,886
Quite clearly the top line numbers are great. Inflation 0.9%, GDP growth 3.2%, unemployment 3.6%, employee income is growing, etc. You just can't look at those numbers and conclude that the economy is doing anything other than roaring. So, A+. We haven't seen numbers like this in a generation.

That said... How much of it is a bubble driven by high deficit spending, artificially low interest rates (if they are), and other exogenous factors? That's really where the debate should be, IMO.

We should be very concerned that this is a debt-driven expansion. Since 2008, when interest rates were driven to zero and have remained very low since, global debt has exploded. That's governmental, corporate, and private debt. If inflation ever shows up and interest rates start to rise it could trigger a lot of business failures and insolvencies at the local, state, and federal government levels.

So I'd say the economy is booming, but extremely fragile. It looks a lot like pre-2008, except without the room to manoever in a crisis.
  #3  
Old 05-04-2019, 06:57 PM
Bryan Ekers's Avatar
Bryan Ekers is offline
Guest
 
Join Date: Nov 2000
Location: Montreal, QC
Posts: 58,746
If Clinton45 had these numbers without the trillion-dollar tax cut and the long-term problems it will create, I'm sure I'd be impressed.
__________________
Don't worry about the end of Inception. We have top men working on it right now. Top. Men.
  #4  
Old 05-05-2019, 11:50 AM
Tee is offline
Guest
 
Join Date: Mar 2002
Location: New Hampshire
Posts: 1,514
Well said Sam Stone.
  #5  
Old 05-05-2019, 12:58 PM
septimus's Avatar
septimus is offline
Guest
 
Join Date: Dec 2009
Location: The Land of Smiles
Posts: 19,119
The U.S. economy is booming hugely by most measures, driven in part by technology and companies like Facebook. The reasons for the boom are pretty clear. Our low interest rates might seem to imply an asset bubble, but the whole world economy is tightly linked and there is loose money worldwide, so capital continues to seek a home in the American boom. I can't think of anything likely to stop the boom except a huge political (radical leftist policies might cause confidence to plummet) or geopolitical shock.

Interesting would be to chart a few of the most plausible paths from here; I hope the Board's economists will present some of the likelier scenarios.
  #6  
Old 05-05-2019, 03:23 PM
Ruken is offline
Charter Member
 
Join Date: May 2003
Location: DC
Posts: 7,225
Productivity was up last quarter but has been relatively flat. We still have a bit of wiggle room to increase the labor force but not much. If the administrator puts a damper on immigration, I would expect that to limit growth in production unless we see a boost to productivity.
  #7  
Old 05-05-2019, 07:04 PM
asahi's Avatar
asahi is offline
Guest
 
Join Date: Aug 2015
Location: On your computer screen
Posts: 9,150
Quote:
Originally Posted by Sam Stone View Post
Quite clearly the top line numbers are great. Inflation 0.9%, GDP growth 3.2%, unemployment 3.6%, employee income is growing, etc. You just can't look at those numbers and conclude that the economy is doing anything other than roaring. So, A+. We haven't seen numbers like this in a generation.

That said... How much of it is a bubble driven by high deficit spending, artificially low interest rates (if they are), and other exogenous factors? That's really where the debate should be, IMO.

We should be very concerned that this is a debt-driven expansion. Since 2008, when interest rates were driven to zero and have remained very low since, global debt has exploded. That's governmental, corporate, and private debt. If inflation ever shows up and interest rates start to rise it could trigger a lot of business failures and insolvencies at the local, state, and federal government levels.

So I'd say the economy is booming, but extremely fragile. It looks a lot like pre-2008, except without the room to manoever in a crisis.
Debt drives expansion. There's nothing wrong with debt per se, provided that it isn't toxic debt.

It should also be pointed out that while wage growth is increasing at the lowest ends of the wage spectrum - a good thing - healthcare costs and real estate prices are exploding, which outpaces wage growth in a lot of cases. The post-2008 expansion hasn't felt like an expansion for many people.
  #8  
Old 05-05-2019, 07:06 PM
asahi's Avatar
asahi is offline
Guest
 
Join Date: Aug 2015
Location: On your computer screen
Posts: 9,150
Quote:
Originally Posted by septimus View Post
The U.S. economy is booming hugely by most measures, driven in part by technology and companies like Facebook. The reasons for the boom are pretty clear. Our low interest rates might seem to imply an asset bubble, but the whole world economy is tightly linked and there is loose money worldwide, so capital continues to seek a home in the American boom. I can't think of anything likely to stop the boom except a huge political (radical leftist policies might cause confidence to plummet) or geopolitical shock.

Interesting would be to chart a few of the most plausible paths from here; I hope the Board's economists will present some of the likelier scenarios.
It probably wouldn't take much of a downturn in growth to cause some serious economic distress, simply because in terms of wealth, the rich have benefited the most from the expansion.
  #9  
Old 05-05-2019, 08:08 PM
XT's Avatar
XT is offline
Agnatheist
Charter Member
 
Join Date: Apr 2003
Location: The Great South West
Posts: 34,959
Quote:
Originally Posted by Velocity View Post
Suppose we completely ignore Trump in this thread - pretend it were President Hillary in the White House or someone else, but with the exact same economic data (Dow Jones above 26,000, unemployment below 4 percent)......how good or bad is the U.S. economy right now?


Without a doubt, there are still "millions of Americans somewhere who are still suffering or not truly benefiting from the economy" - but that would always be the case no matter what. Is this a "truly" good economy or is it a mirage?

On an A-F grading scale, are we in an A- economy at the moment? B+?
Well, the DOW is almost certainly going to drop substantially tomorrow, but it is up. Not sure if that's the measure it is assumed to be wrt 'good' or 'bad' though. Unemployment is certainly low.

I would say that the US is still benefitting from the fact that we are one of the best investments, world wide, so money continues to flow in, which helps. We also have put aside our snit with the EU and straightened out the whole NAFTA thing (which basically is the same as it was, but allowed Trump to declare victory). But with his tweets this weekend, Trump is upping the ante wrt China, and the repercussions of that decision is almost certainly going to sink the DOW tomorrow (coupled with the drop in oil as well of course). Our debt is huge, which is going to hurt us in the medium and long terms and will probably cripple any sort of economic expansion down the road. Everything, though, is probably going to hinge on how the trade war with China finally pans out and what we end up accepting or forcing the Chinese to concede depending on how it goes.


Personally, I give the economy a C-, but I'm not an economist so perhaps I'm missing the technical details. It seems...fragile....to me, with a lot hinging on the actions of a monkey at the controls as well as wonderful groups like the CCP who are, perhaps, even more stupid than trump is and seemingly more clueless as to what to do. Europe doesn't seem all that strong either, South Korea is having issues, Japan is having issues, Canada doesn't seem to be shooting up as folks predicted, nor is Australia...really, it all seems a bit like a house of cards at a time when the US has a bull in the china shop, so to speak.
__________________
-XT

That's what happens when you let rednecks play with anti-matter!

Last edited by XT; 05-05-2019 at 08:09 PM.
  #10  
Old 05-06-2019, 09:17 AM
puddleglum's Avatar
puddleglum is offline
Guest
 
Join Date: Oct 2000
Location: a van down by the river
Posts: 6,464
The economy is great, low inflation, low unemployment, wages rising, productivity rising, labor force participation rising. I hope this shows the fretful how little the president matters to the economy.

Clouds on the horizon would be entitlements and deficits are out of control, a possible democrat takeover of congress and the presidency in 2020, conflict in the middle east could cause oil price to soar, and the biggest is that China's growth is slowing down just at a time when they are politically consolidating power with Xie and the belt and road initiative is likely going to be a disaster.
  #11  
Old 05-06-2019, 09:29 AM
BobLibDem is offline
Guest
 
Join Date: Jul 2003
Location: Home 07 NCAA HockeyChamps
Posts: 21,179
Quote:
Originally Posted by puddleglum View Post
The economy is great, low inflation, low unemployment, wages rising, productivity rising, labor force participation rising. I hope this shows the fretful how little the president matters to the economy.

Clouds on the horizon would be entitlements and deficits are out of control, a possible democrat takeover of congress and the presidency in 2020...
So the president matters little to the economy, except if a Democrat takes over? Got it.

Right now unemployment is low but wages for the working class are still stagnant. I think the biggest problem is that the Republicans have eaten the seed corn. When things slow down, one tool in the box is to lower taxes to prime the pump and jump start the economy. But taxes are too low and really can't be lowered should the economy slows down. Moreover, the corporate tax cuts did nothing to stimulate the economy, many companies simply bought back their own stock and very few invested their bonanza in equipment and hiring.
  #12  
Old 05-06-2019, 10:44 AM
puddleglum's Avatar
puddleglum is offline
Guest
 
Join Date: Oct 2000
Location: a van down by the river
Posts: 6,464
Quote:
Originally Posted by BobLibDem View Post
So the president matters little to the economy, except if a Democrat takes over? Got it.

Right now unemployment is low but wages for the working class are still stagnant. I think the biggest problem is that the Republicans have eaten the seed corn. When things slow down, one tool in the box is to lower taxes to prime the pump and jump start the economy. But taxes are too low and really can't be lowered should the economy slows down. Moreover, the corporate tax cuts did nothing to stimulate the economy, many companies simply bought back their own stock and very few invested their bonanza in equipment and hiring.
The president matters little because he can't control fiscal policy without a huge majority in congress. If a party has both they can do all sorts of damage to the economy if they are so inclined.

You are mixing your metaphors. When the economy slows if the problem is a demand shock then the government can stimulate solely with monetary policy which is more effective. If the problem is a real shock then having a low corporate tax rate would help but in that case there is no reason to wait.
  #13  
Old 05-06-2019, 10:49 AM
BobLibDem is offline
Guest
 
Join Date: Jul 2003
Location: Home 07 NCAA HockeyChamps
Posts: 21,179
Quote:
Originally Posted by puddleglum View Post
If the problem is a real shock then having a low corporate tax rate would help but in that case there is no reason to wait.
Or you can just lower corporate taxes because your corporate donors threaten to cut you off if you don't, and then you drain the treasury without doing a whit of good for the economy.
  #14  
Old 05-06-2019, 11:38 AM
XT's Avatar
XT is offline
Agnatheist
Charter Member
 
Join Date: Apr 2003
Location: The Great South West
Posts: 34,959
Quote:
Originally Posted by BobLibDem View Post
Or you can just lower corporate taxes because your corporate donors threaten to cut you off if you don't, and then you drain the treasury without doing a whit of good for the economy.
Less than 10% of federal taxes come in from corporate tax, so probably isn't going to have that big an effect. US corporate taxes are actually high comparatively speaking...it's our income tax and payroll taxes that is generally where folks want to make tweaks, since they comprise over 80% of all tax revenue.
__________________
-XT

That's what happens when you let rednecks play with anti-matter!
  #15  
Old 05-06-2019, 11:52 AM
BobLibDem is offline
Guest
 
Join Date: Jul 2003
Location: Home 07 NCAA HockeyChamps
Posts: 21,179
Quote:
Originally Posted by XT View Post
US corporate taxes are actually high comparatively speaking...
Cry me a river. I personally paid more in taxes than these 60 companies combined.

Delta Airlines, General Motors, Halliburton, US Steel, Whirlpool all have less skin in the game than I do.
  #16  
Old 05-06-2019, 11:59 AM
XT's Avatar
XT is offline
Agnatheist
Charter Member
 
Join Date: Apr 2003
Location: The Great South West
Posts: 34,959
Quote:
Originally Posted by BobLibDem View Post
Cry me a river. I personally paid more in taxes than these 60 companies combined.

Delta Airlines, General Motors, Halliburton, US Steel, Whirlpool all have less skin in the game than I do.
You seem to be arguing some other point than what started this discussion. The US lowering the corporate tax rate isn't going to 'drain the treasury'. Whether you think the current rate is what it should be is a completely separate issue, but the US does, in fact, have a higher corporate tax rate than many other countries...though, it's complicated, since they often don't actually pay that rate. But corporate taxes are just not a big part of the US tax revenue stream, nor really a big part of the tax revenue in other countries either.
__________________
-XT

That's what happens when you let rednecks play with anti-matter!
  #17  
Old 05-06-2019, 12:26 PM
Akaj's Avatar
Akaj is offline
Guest
 
Join Date: May 2018
Location: In the vanishing middle
Posts: 536
I will grudgingly acknowledge that developments since Trump took office seem to have strengthened many economic indicators, adding fuel to what was already a strong economy under Obama.

I will also point out that the economy seemed to be sailing along at full speed in late 2007, too.
__________________
I'm not expecting any surprises.
  #18  
Old 05-06-2019, 01:28 PM
UnwittingAmericans is offline
Guest
 
Join Date: Feb 2018
Posts: 265
Trump inherited a good economy and hasn't succeeded in fucking it up despite a couple of hairbrained ideas to supercharge it.

Absent a financial or geopolitical black swan, I doubt things are going to get fucked up enough between now and then to hurt him in 2020.

A dot-com or 2007 - 2008 type collapse isn't in the cards, and the Fed should easily be able to just fiddle around here and there. The best you could have hoped for was a Bush I type recession. But there's basically no inflation right now, which is a bit of a mystery.
  #19  
Old 05-06-2019, 01:49 PM
Akaj's Avatar
Akaj is offline
Guest
 
Join Date: May 2018
Location: In the vanishing middle
Posts: 536
Quote:
Originally Posted by UnwittingAmericans View Post
Trump inherited a good economy and hasn't succeeded in fucking it up despite a couple of hairbrained ideas to supercharge it.

Absent a financial or geopolitical black swan, I doubt things are going to get fucked up enough between now and then to hurt him in 2020.

A dot-com or 2007 - 2008 type collapse isn't in the cards, and the Fed should easily be able to just fiddle around here and there. The best you could have hoped for was a Bush I type recession. But there's basically no inflation right now, which is a bit of a mystery.
The point of the OP isn't how the economy will or won't help Trump win re-election. (We did that one a few weeks ago.) It was to remove politics from the question of how good the economy is at the moment.

My answer: it seems good. But how it seems at any given point of time isn't a good predictor of how we'll view it in hindsight. Shit happens.
__________________
I'm not expecting any surprises.
  #20  
Old 05-06-2019, 01:50 PM
Dinsdale is offline
Guest
 
Join Date: May 2000
Posts: 18,041
Quote:
Originally Posted by BobLibDem View Post
...

Right now unemployment is low but wages for the working class are still stagnant. ...
What do people think about the unemployment figures. What sorts of jobs have been created? I was driving about the other day, and was stricken by the number of "HELP WANTED" signs I saw in front of just about every small industry. I was mentioning that to another couple that evening, and they said something like, "Yeah, but those jobs don't pay a living wage." Which then led to a discussion of what constituted a living wage and how much unskilled labor ought to earn...

My ignorant impression is that MANY of the newer jobs are pretty low paying, with little promotion potential, possibly pt-time. Not exactly the basis for upward mobility and supporting a middle class existence/family. But - rather than any politics, my impression reflects my view of corporate efforts over the past decade+ to reduce workforce, wages, etc.
__________________
I used to be disgusted.
Now I try to be amused.
  #21  
Old 05-06-2019, 02:41 PM
UnwittingAmericans is offline
Guest
 
Join Date: Feb 2018
Posts: 265
Quote:
Originally Posted by Akaj View Post
The point of the OP isn't how the economy will or won't help Trump win re-election. (We did that one a few weeks ago.) It was to remove politics from the question of how good the economy is at the moment.

My answer: it seems good. But how it seems at any given point of time isn't a good predictor of how we'll view it in hindsight. Shit happens.
Oh, I dunno there Chico, FWIW, you mentioned Trump AND Obama and "grudgingly."

But I'm sure your entreaty will be effective in insuring that this will be the SDMB thread that stays on track.
  #22  
Old 05-06-2019, 03:01 PM
Akaj's Avatar
Akaj is offline
Guest
 
Join Date: May 2018
Location: In the vanishing middle
Posts: 536
Quote:
Originally Posted by UnwittingAmericans View Post
Oh, I dunno there Chico, FWIW, you mentioned Trump AND Obama and "grudgingly."

But I'm sure your entreaty will be effective in insuring that this will be the SDMB thread that stays on track.
Dammit, my cover's blown! After 500+ posts in which I strenuously tried to stay objective, now everyone knows I think poorly of Trump.

__________________
I'm not expecting any surprises.
Reply

Bookmarks

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is Off
HTML code is Off

Forum Jump


All times are GMT -5. The time now is 12:00 AM.

Powered by vBulletin® Version 3.8.7
Copyright ©2000 - 2019, vBulletin Solutions, Inc.

Send questions for Cecil Adams to: cecil@straightdope.com

Send comments about this website to: webmaster@straightdope.com

Terms of Use / Privacy Policy

Advertise on the Straight Dope!
(Your direct line to thousands of the smartest, hippest people on the planet, plus a few total dipsticks.)

Copyright 2018 STM Reader, LLC.

 
Copyright © 2017