Yep all the hot talk about GDP growth was nothing but nonsense....every time they hype up GDP, talking 3-4% you know its got to be one big fat joke. By now with unemployment at historical lows and earnings growth just surging quarter over quarter how can GDP still be so stagnant....if after the "great tax reforms" nothing shows you can just forget it, right now world economies are going gangbusters and if US GDP can't grab a 3% headline number it never will....if anything we are heading into a cycle of slowing growth so good luck getting any GDP near 3% ....looks like the fed needs to push for QE 4-5 and 6 if they want that 3% GDP soon ...... All that optimism for hot first-quarter economic growth is rapidly fading away Back in late January the Atlanta Fed was calling for a 5.4 percent GDP gain, but on Wednesday it said growth likely will be just 1.9 percent. The cut comes amid similar reductions from J.P. Morgan and Goldman Sachs, who now respectively see growth at 2 percent and 1.8 percent. Wednesday's disappointing retail sales number was at the root of the latest reductions. https://www.cnbc.com/2018/03/14/all...r-economic-growth-is-rapidly-fading-away.html Jeff Cox | @JeffCoxCNBCcom Published 6 Hours AgoUpdated 3 Hours Ago
The problem is on the Product part of Gross Domestic Product. Even though the economy is roaring, producing more will be difficult. The birth rate has fallen, immigration is down, and the only technology that promises productivity enhancements, robotics and driverless cars, will probably cost more jobs that the productivity that they create. The only realistic ways to stay above 3.5% is to convince a large portion of people not currently working to reenter the job market, or convince more workers to delay retirement.
Real wages for 95% of Americans are basically flat since the 1970s, despite an upward march in productivity. They have been sacrificed at the stock market alter of corporate profit margins, which have never been higher. The wealthiest 1% of Americans now own a greater share of the national wealth today than they have at any time since the mid-1920s. This isn't an attack on the rich, it is a simple fact. The average American walks around with significant student loan debt, huge housing costs, pays more and more for health insurance, etc, and his or her take home wages have not kept up with these increases. The people with the highest propensity to use extra income to consume, do not have the income needed to do so for the reasons listed above. Until that fact changes, the economy will continue to muddle along.
For many years, I've been thinking GDP would be just a joke. Added-value should be the real issue. Many advanced/developed countries have been converted to mainly service-based economy (relying on import goods) with lesser added values generated, rather than production-based economy like China with much bigger added values generated year after year. QE alone, without properly used/allocated, would not solve the issue fundamentally, imo. Just unsure whether I could be wrong completely.
real wages and I would argue the standard of living of most americans has been flat or down because of what you wrote and larger national, state and local income taxes and 200 other taxes including estate taxes, 700 percent systemic inflation caused by the creation of trillions of dollars at the fed. I wonder wages would have been if not for about one million immigrants per year since 1970. Imagine how more evenly distributed the wealth would have been without inflation, massive taxation and immigration? And the funny thing is that its still going on. We might be able to handle say immigration. But immigration massive taxation and inflation... its designed to destroy the standard of living of americans.
What would the USA be like without immigrants since 1970? Well let's see. First no Google, Amazon, Ebay, Tesla, Space/X and a host of other new firms created by immigrants. Go to your nearest university and take a look at the students studying for advanced scientific and engineering degrees. Almost all of them are immigrants. Legal immigrants significantly make the US better.