Why do some Americans believe that the economy is in shambles?

Question

The economy is booming, the Dow Jones has reached record highs, taxes are lower, the unemployment rate is lower than it was during the Clinton Administration. Yet if you believe the polls out there most Americans believe that the opposite is true. Does anyone know why this is?

Answer 1

Because the only ones talking are the ones who are against President Bush, and his policies. Since the majority of people (not just Americans, b ut all people) are too concerned with their own lives to give the issue it's due dilligence, they listen to whatever it is they see on TV and believe it.

BTW... you forogt that minority buiness ownership is at a record high, housing starts are up- overall- housing purchases are up- overall- minority home ownership is up, consumer confidence has dropped some over the past year, however is still up overall.

Answer 2

Perhaps because the dollar is weaker than the Euro and has lost strength against other currencies as well.

Just a thought though, if it's weaker does this increase the number of foreigners that are willing to travel to the USA and cause them to buy more, thus strengthening our economy?

And if our unemployment rate is lower than when Clinton was in office, does this mean that the illegals are not adversely affecting the economy? Or does this simply mean that people that once had well paying construction jobs are now forced to work 2 and 3 lower paying jobs so the unemployment rate is giving a false picture?

Answer 3

I think you might made one key mistake - taxes, unemployment rate and the stock market index are only some of the indicators of economic health, not all of them. You might have gotten the chain of causality wrong with the taxes thing, lower taxes are generally used to stimulate the economy by encouraging business activity. The cause -> lower taxes, the effect -> better economy, not the other way round.

The US economy does have its challenges, though, due in a large part to very high levels of consumption over and above what the US actually produces. This is not necessarily a bad thing until you remember that the trade deficit is currently being financed by countries like China and Japan who hold a large amount of US dollars in their reserves (I think China has something like US$ 900 BILLION in its reserves) now. At some point, these countries are going to want their money BACK. Consider that China had only US $ 100 billion or so in 2001, and I leave it to you to wonder if this might perhaps pose a risk to the United States economy.

Answer 4

Economy is such a big word. Lets take a look at what the middle class should really be talking about. People are saving less, college cost,health care cost, gas prices,food cost,energy cost, Bush said that the deficit is shrinking but the truth is that large corporations made record profits last year so we took in more taxes but the people are still waiting for the trickle down. The dollar's has dropped 12% from 2002. But most important is the gap between the rich and poor compared to today with the 50s 60s and 70s you will then see that "We the People" is under attack by large corporations.

Answer 5

Many of the answers here are about calling liberals names, but let's look at some facts:

While it is true the total economy is doing well on paper, but there is something the Republicans are not taking into consideration.

Like in the 1980's the government is borrowing huge amounts of money. Like Regan, Bush is running things on a credit card. In my house, I feel like I'm doing well while I'm maxing out my credit cards. But sooner or later we have to pay it back. And that will mean higher taxes sooner or later.

Over all there has not been a tax cut. Federal taxes went down but most state and local taxes went up so as a whole the government has not left any more money in my pocket.

Average income is rising much slower than inflation. So while unemployment is low, more people are making less relative to the cost of goods.

Higher energy costs works like a defacto tax. I have to get to my job every day and I have to drive to get there. If gas was $10 a gallon, I would still have to pay it to get to work. I have to heat my house in the winter and I have to have electricity. I have to pay whatever they charge.

This is the stuff Rush won't tell you and Bush hopes you don't notice.

Answer 6

Six months, at the outside.
The 'economy' is booming because people mortgaged their grandchildren's lifetimes to pay for supersized drywall suburbia shanties, and now, the GNP looks great because those same people are feeding fuel into their SUVs to drive to work.
The economy is booming because the price of oil is propping up the value of the dollar. That's why the PTB freaked when Saddam Hussein wanted to sell oil for Euros.
The people know the economy isn't doing as well as the news reports say because they are seeing their savings go down and their credit card balances go up. The standard indicators of the economy don't show this.
The government stopped reporting one key factor; the size of the money supply. This means they don't want the 'street' to know how bad things really are.
Everything on the stock market is based on the perception of perpetual growth. The perception comes to a conflict when the true oil production peak is determined, or when oil hits 85 dollars (my number from the sky ).
Buy less, buy local, get to know if you can be a better neighbor or a better shot.

Answer 7

Because some of us have lived through periods which were similar to this and recognize that, in the last two years oil has tripled in price, steel has doubled, copper has gone up by a factor of 4, the interest rates have tripled in the guise of holding down inflation, wages have remained stagnant for a decade, our manufacturing base is moving offshore, domestic auto production is in the tank, our government is prosecuting a war using deficit spending such that the federal deficit is the greatest in history, the deficit is being funded largely by China so we cannot press fair trade, the unemployment rate is artificially low due to the number of people who quit looking for work or have exhausted benefits, Dow Jones just took a major correction, orders for durable goods are starting to sag, to name a few. In the next year or two we will begin to compete with the government deficit to borrow money which will raise interest rates even further destroying the mortgage market. The big increases in the economic figures will be seen for what they are, a result of inflation with no major increase in GDP.
Is this enough of an indicator why working people who have seen it before ( 1980 ish) are not convinced by the smoke and mirrors.
Here's an idea for you, max out your credit and then deal with double digit interest again. Its coming.
By the way that was a result of Ford lifting wage and price controls and nothing that Carter did.

Answer 8

why do you retards keep saying that unemployment was lower than in the Clinton Administration... Clinton's low was 3.9 in Oct. of 2000... what's the closest Bush has been? I think it was like 4.1 when he was sworn in... and it's not been that low since...

to answer your question... most people don't play the stock market... and gas and insurance costs are WAY up and the average pay for the middle class (if you include inflation) has dropped...

I would cite these, but you don't cite anything and you wouldn't believe me if I did anyway... it's not that hard to find most of this stuff anyway...

oh... and tax cuts help those the wealthiest the most... the lower 50 percent of Americans only pay 1 percent of the taxes, due to their low pay... so tax cuts don't help...

Answer 9

You are obviously way behind on your news; News Flash: Latest headlines: DOW OFF 121 points. The unemployment rate is higher than it has ever been, just because it goes down a little doesn't mean it is getting better relevant to what it should be. The Clinton Admin. left us with with the highest overage ever in the budget. Now look, we've got the highest deficit ever. Wake up you dumb as* Repub. and smell the rotten roses. This country is going to hel* and you shut your eyes to it. Oh........, and we are in a war that is costing billions a day and there was no REAL good reason for starting it and no good reason for staying in it.

Answer 10

chubbyguy makes a great point. The economy, the stock market, jobs are all doing great at the aggregate level. But in a great numbers, most American's are overexteded beyond what they can afford. They got snookered again in this housing bubble (just like they did in the internet bubble). I know several people that turned to flipping, and the only flipping they see if that middle finger from the loan companies. It aint' only the rich buying those plasma, DLP, and Hi-Def tv's at Best Buy. I work with this HR chick who drives a Mercedes, and she makes no more money than I do. But hey, she does look HOT in that car. I know a teacher that buys $200 jeans. She lives in an apartment, drives a Benz also, but hey, YOU and I will work our asses off for her retirement. Cheers.

Answer 11

$3 a gallon gasoline does not make for a good economy. It impedes travel and kills vacations. I don't know about you, but I sure don't have any extra cash laying around to do much like movies and restaurants. Won't say who's fault it is, only that I don't have the free cash I did 6 years ago. No new jewelry or alot of other things I could afford then. When the luxury money disappears, the economy is bad, and mine has evaporated. Glad it's better where you are.