It's not exactly dead, but the pace of U.S. economic growth since 2009 could rightfully be called morbid.
That's because the prime movers of economic activity – consumers – are acting like the walking dead.
Since 2009, the U.S.' GDP (the total value of everything produced by all the people and companies in the country) averaged annual growth of only 1.3%.
The average annual growth rate from 1990 to 2000 was 3.3%. Compared to that, current growth (only 1.2% in the first quarter of 2017) looks like more of the same slow slog we've been suffering through.
What's really killing the economy?
A Shrinking GDP, a Rising Debt… and Who to Blame
Since two-thirds of economic growth is driven by consumer spending, something must be wrong there.
In fact, there's a lot wrong. And what's wrong can easily, and rightfully, be blamed on politicians and their paymasters. Good old crony capitalists.
Let's go down the list, shall we?
1) There are fewer good jobs and career opportunities at home.
That's because a series of bad trade deals exported U.S. jobs to the benefit of giant multinational companies, who, to add insult to injury, leave their profits overseas, flooding foreign economies with cheap money to spur consumer spending abroad.
2) Healthcare costs are out of control.
Thanks to bad politicians, who probably still haven't read the Affordable Care Act they signed into law, a lot of money spent on healthcare would otherwise be spent elsewhere in the economy.
3) Student loan debt is fast approaching $2 trillion.
Once again, thanks to politicians pushing higher education as a means to a better future, while the Fed keeps rates low and crony capitalists make loans easy to access. Enslaving not only student borrowers but also their parents and relatives diverts consumer spending.
Besides sky-high healthcare costs and huge student loan costs…
4) Rising house prices and rising rent are sapping consumers.
Healthcare, housing, and education costs accounted for 25% of consumer spending in 1980. Today, the percentage of spending on the necessary trio is fast approaching 40%.
No wonder the economy can't reach the speed it needs for lift-off.
The Fed pumping more than $4 trillion into the same banks that went bust from slinging subprime derivatives didn't trickle down to American consumers as advertised.
Sure, there are loans to be had to buy houses, if you have the right credit.
And there are consumer loans to buy almost anything, if racking up credit card charges, fees, and astronomical interest payments is your only borrowing facility.
But as cheap as interest rates are and as available as credit is, the truth is that American consumers are tapped out.
Household debt in America just topped $12.73 trillion, a new record, eclipsing the old mark of $12.68 set back at the height of the housing bubble in 2007.
Consumers need more credit to consume, but it now takes more credit to drive the same percentage of economic growth, which ultimately means more debt and less consumption.
That's a classic negative feedback loop.
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About the Author
Shah Gilani is the Event Trading Specialist for Money Map Press. In Zenith Trading Circle Shah reveals the worst companies in the markets - right from his coveted Bankruptcy Almanac - and how readers can trade them over and over again for huge gains. He also writes our most talked-about publication, Wall Street Insights & Indictments, where he reveals how Wall Street's high-stakes game is really played.