I have constantly said ‘the bigger they are, the harder they fall’ when it comes to the lies and misdirection about the current state of the economy. This is no truer than today, where many believe the US economy is doing well but the reality is that underlying conditions are more unstable than ever before. The US is in terrible shape, as debt continues to explode and people cannot pay their bills. There is the feeling of wealth, but without the actual existence of it.
Wealth today is a lot lower than what it was thirty years ago. However, there are many people who are saying that the current state of the economy feels as though it was the late 1990s in the best sense.
Americans increasingly rate this as the best economy since the late 1990s, with a recent surge in optimism, even though many economic metrics show striking similarities to the final years of the Obama administration.
Fifty-nine percent of Americans say they are better off financially today than they were a year ago, the highest since 1999, according to a Gallup survey released last week. And nearly three-quarters predict they will do better a year from now, the most optimistic reading that Gallup’s annual “Mood of the Nation” survey has ever recorded.
Other polls and surveys aren’t quite as ebullient, but nearly all show that Americans are far less worried about the economy and their personal financial situations than they were during the last presidential election.
Upbeat sentiment is critical for the U.S. economy because it motivates consumer spending, the most important driver of U.S. economic growth. And President Donald Trump is counting on a strong economy to motivate voters to turn out at the polls and reelect him.
Bryan DeHenau runs a roofing business in Macomb County, Michigan, just outside Detroit. Around the time of the last presidential election, he had enough jobs to keep one crew busy, but some of the gigs were barely profitable. Today he can keep three crews busy during the spring and summer months, and he has been able to raise prices, regularly giving people estimates of $20,000 to totally redo a roof and finding that “they don’t even bat an eye about it anymore.”
“I’m driving a brand-new 2019 Ford F-250. I’ve got work coming out the ying-yang. I’m doing OK,” DeHenau said. “Four years ago, I couldn’t sleep at night. That’s a pretty big turnaround.”
Some of the biggest recent increases in consumer confidence have come from independent voters and less affluent households, according to Richard Curtin, director of the University of Michigan Surveys of Consumers. His team always asks people to explain why they feel confident, and lately they are hearing near-record levels of people saying their income and wealth are rising.
“We’ve only seen this many people mention income gains twice before: 1966 after the 1960s expansion and 2000 after the 1990s expansion,” Curtin said. (source)
It would be nice to say that such truly was the case, based on economic fundamentals. However, this is simply not true.
Right now is not a time to relax. It is a time to prepare and get ready for the future, because hard times will come, and when they do, because the recession of 2007 never ended in terms of her effects, the coming one will be worse than her.
Don’t get caught unprepared.