Any economist, pundit or politician who tells you that our economy would get better if we could only increase access to credit (debt) or "incentivize" poor people to work while cutting their food stamps and the minimum wage, is either a charlatan or an idiot.
What happens when Americans, as a nation, start saving and stop spending on credit is economic stagnation or recession. So we must increase Americans' household incomes, and/or lower their household expenses to allow them to continue spending. After all, the well-off can buy only so many houses, yachts and luxury goods. Yes, they can save and invest in stocks and other securities... but their investments won't translate into U.S. jobs and economic growth if there is no market (consumer demand) to drive it.
Indeed, the Dow just hit a record high, corporate profits and U.S. workers' productivity are at all-time highs, and yet... nobody is doing an economic endzone dance right now. Working class Americans feels more economically insecure than ever.
And that's why Obamacare is so necessary, among other federal programs.
According to a 2013 study by the AARP, over the past 10 years, health care spending for average middle-income households increased 51 percent, compared to only 30 percent growth in household income. Over that same period, healthcare inflation increased three times the rate of growth for all other products and services; and per capita expenditure on health care increased 72 percent!
We must cut our per capita expenditure on health care while protecting average Americans from treatable illness and medical bankruptcy. Only the Democrats are proposing real solutions to do that. Republicans keep dawdling while Americans are dying and drowning in debt.
Under President Obama, the rate of healthcare inflation has finally slowed and is projected to slow further. Coincidence?
The average American is broke and buying things they cannot afford with debt again. Debt based consumer financing again filling the gap of a shrinking middle class.
Posted by mybudget360 | December 1, 2013