PROGRESS REPORT - The White House says [the economy] is "cooking along" with "strong and sustained economic growth." Ordinary Americans do not share the president's enthusiasm: 63 percent of Americans characterize the economy as "bad," "very bad," or "terrible," and "by 58 to 36 percent people say economic conditions are getting worse, not better." The divide is understandable. For the beneficiaries of President Bush's economic policies -- major corporations and wealthy Americans -- times are booming. Inflation-adjusted corporate profits have risen more than 50 percent since the last quarter of 2001. But . . . most families are losing economic ground -- losing purchasing power, stretching stagnant wages, and piling up debt.
With spending growth outstripping disposable income, personal savings rates have plummeted. In August, the personal savings rate dropped to negative 2.2 percent, a level not seen since the Great Depression, and remained negative for the fourth straight month in October. As a result, households are now spending a record 13.6 percent of their disposable income to service their outstanding debt.
"If you ask the classic Ronald Reagan question, 'Are you better off now than you were four years ago?' a large number of Americans are in fact not better off," says Michael Mussa, a member of Reagan's Council of Economic Advisers from 1986 to 1988. Bloomberg News notes that Mussa's assessment "is reflected in the 'misery index,' a combination of the rates of unemployment and inflation, which reached a 12-year high of 9.8 in September as energy prices escalated." That is higher than the 7.8 level when President Bush took office and "higher than the average of 8.7 during the past two decades."
Report here...
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