A new report came out earlier this month reporting on the continual increase in economic measures. However, before you spend your day window shopping, realize a couple significant points:
- The economy is being driven by record profits from America’s largest corporations. Though this is good for economic measures, nominal wages have not increased, meaning the profits are not trickling down.
- Unemployment rate is remaining constant. Constant, but unstable. Our country continues to replace skilled workers with seasonal and low wage labor. The new report indicates that the Rust Belt is suffering the most with labor issue, given the layoffs forced by the auto industry.
- The National Deficit figures for this year will be reported on Friday. The deficit has been cut in half since 2004’s record setting figure of $500 billion. Many of my friends have asked how much a 250 billion dollar deficit will affect our fiscal situation…not much. 250 billion in a government budget of nine trillion is minimal.
- The greatest contributor to the decreasing deficit is the record profits by corporations, which increase the nation’s corporate tax. It should be noted that personal income tax has not played a role in the deficit, and has remained constant. This is important to note as the Bush tax cuts of 2002 and 2004 were almost exclusively to personal income taxes.
- With interest rates turning upward over the past year, the real estate market has slowed. This will pose a problem for economic growth to continue. The real estate market accounted for a large portion (20% I believe) of new economic growth over the past three years. Investment in residential housing decreased at the sharpest rate (down 11.1%) within the past decade.