MAC_32
Footballguy
Then perhaps we should change how this works.
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US economy thread (3 Viewers)
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MAC_32
Footballguy
Neither did I. If we can't discuss something like this in this forum then I think those that run this place need to re-think things.
djmich
Footballguy
I’d like to be able to talk about this stuff, but imo articles like this are going to lead to political discussion. It doesn’t have to, but it will. I mean the outlet in this case literally has “politic” in its name.
Desert_Power
Footballguy
Yep. This is the true, underlying trend that drives feelings of malaise. And it is accelerating right now.
Sparky Polastri
Footballguy
Sorry but there are at least two glaring red flags with this piece. The first one is the use of political terms like "Bidenomics". The second is that they are using a narrow subset of numbers. When talking about inflation, and the government's role in it, we always have to go back a minimum of 6+ years to look at all the policies and actions if we want to begin to have a constructive conversation. I skimmed, but am skeptical of the honesty/completeness of the conclusions based on these two things alone. Given the author's credentials, I am rather confident he knows both these things and he chose to proceed anyway. Just seems off.
MAC_32
Footballguy
The below is also applicable to this subject.
This is not political content, it's the economy, in a thread about the economy. The messaging that was delivered throughout 2024 was both accurate and unintentionally misleading, we need to re-think the metrics we use to quantify economic health.
djmich
Footballguy
I could’ve sworn I’ve seen data that for the bottom 25% and 50% real median income and net worth is the highest it’s ever been. Are you sure this is true?
So if the situation for bottom earners improves, in real dollars…is that bad because the top grew more?
Sparky Polastri
Footballguy
Doesn't matter in this country. We can change all the metrics we want. Even if we made them 100% accurate, you can't force people to steer away from their subjective perspective aka their "feels" as my dad would say and make them think objectively. That was just attempted and was an unmitigated disaster.
Nugget
Footballguy
If you and your coworker get to split a $10K raise, and your share is $360, you may be better off than you were before. This year another $10K, your share is $240. At some point, people may question the distribution.
Desert_Power
Footballguy
Real income should grow over time so those quartiles being at all time high is likely generally true outside of a recession or immediate aftermath.
Indeed, wage growth at the lower end in the post-pandemic period was some of the strongest we’ve seen in a while.
To your last point, my answer would generally be no. The pie is not fixed. Productivity can go up or down. So can the labor force and many other factors.
Ridgeback
Footballguy
How can you honestly discuss the economy without bringing politics into it? Especially since we now have big business running the country, for good or bad?
Trying to discuss this without the big elephant in the room is being intellectualy dishonest IMO.
I get that it's a banned subject, this is just an opinion on trying to tip toe around the obvious.
Trying to discuss this without the big elephant in the room is being intellectualy dishonest IMO.
I get that it's a banned subject, this is just an opinion on trying to tip toe around the obvious.
djmich
Footballguy
Agree mostly, in an alternate universe we'd delve a little deeper but alas not here.
Max Power
Footballguy
There is plenty of middle ground where most people want the same thing. Economic policy conversations can be had to highlight the pros and cons of decisions without being political.
seeing as the thread is 56 pages long seems like can have a discussion without being overly political
Desert_Power
Footballguy
I think we can talk about what and when regarding the economy without discussing why and how.
TripItUp
Footballguy
Back to the economy...
I'm not an econ PhD but if...
1) Federal Govt balances the budget and or reduces the debt
2) Inflation goes down as result of decreased govt spending
3) Govt reduces regulatory barriers for businesses
4) Govt reduces personal and business taxes
All of these things would lead to a stronger economy and would lead one to be bullish on said economy and stock prices?
Agree or disagree?
I'm not an econ PhD but if...
1) Federal Govt balances the budget and or reduces the debt
2) Inflation goes down as result of decreased govt spending
3) Govt reduces regulatory barriers for businesses
4) Govt reduces personal and business taxes
All of these things would lead to a stronger economy and would lead one to be bullish on said economy and stock prices?
Agree or disagree?
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fruity pebbles
Footballguy
Since it’s my realm of employment, the travel nursing rates have been a pretty good gauge on how strong the employment and economy has been. Nursing has been one of the strongest job markets with anyone with a pulse being able to land employment. Still the case but nothing like what it was. Travel rates are half what they were in 2022. Unless you are willing to go anywhere with a specific need it almost doesn’t make sense anymore from a financially aspect when everything is factored in. We are also a lot more particular when hiring staff nurses. We can pick and choose vs happy to get anyone.
uwillbsoon
Footballguy
Sure.
Generally cutting taxes is inflationary. So if you're cutting government spending and cutting taxes by 3x that spending cut, I'm not convinced you'll curb inflation.
Especially if you implement across the board tariffs.
djmich
Footballguy
That's basically a version of the model it appears we're attempting and our best shot at getting out of a nearing disastrous debt situation imo.
I think the biggest risk is in reducing government spend, which as I mentioned earlier has been a primary economic driver recently...the underlying economy is weak. To your list, hopefully tax cuts and regulatory elimination stimulates growth to offset. And the bond markets see a light at end of the budget tunnel, which provides relief on long term rates for consumers and government.
Likelihood to thread the needle perfectly...its a realllly tight window imo. Outsized growth would help a ton.
TripItUp
Footballguy
good point about the tariffs, it's unclear to me what impact those will have...I'm not sure anybody knows based on my readings...certainly the media has some predictions. I also think the actual application of Tariffs is unclear. So definitely a factor worth monitoring, but almost seems like guess work at this point.
djmich
Footballguy
Anyone whos taken any economics courses has been drilled with "tariffs bad", and thats what I see as the overwhelming narrative today.
For our unique situation, today, when you consider second order effects...I'm not sure they're not more effective than say raising taxes or printing money. Something I've been trying to explore and honestly I've yet to find an analysis that in my view credibly considers this holistically.
Desert_Power
Footballguy
Setting aside the fact that they’re actually doing this in the reverse order, the second bullet should probably read: reduced inflation due to recession caused by demand shock in #1
Stoneworker
Footballguy
That's because it wasn't just supply chain issues, but excessive fiscal stimulus and loose monetary policy on the demand side that wasn't acknowledged at the time.
Excessive fiscal stimulus remains in the form of record gov't deficits.
Monetary policy has been tightened significantly on a relative basis, but still not tight enough to solve the "last mile" of inflation.
In fact it's quite possible the 2024 Fed cuts were premature and counterproductive
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djmich
Footballguy
Agree, but there is zero chance #1 comes remotely close to happening any time soon.
But yes, unfortunately, even decelerating our rate of growth in terms of government deficit will put pressure on demand. But at some point, we have to pretend the deficit and debt matters.
ericttspikes
Footballguy
Anecdotally, my small business had it's best year ever last year, rev and profit. For this year we are kinda hunkering down to start the year. Healthcare costs just went up close to 20% and I don't see this admin doing anything to address that. Honestly, that is one of our biggest margin eaters that will never go down. At somepoint it will be unsustainable for a company our size. Couple that with uncertainty on taxes, tariffs, interest rates and the employment market going forward it's tough for us to have a concrete business plan right now. In wait and see mode.
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SFBayDuck
Footballguy
The problem is prices across the economy rarely actually go down, with some exceptions like gas which go up and down or hopefully eggs, which based on threads here seem to make up approximately 89% of some people’s budgets. We just want the rate of inflation to slow, so that wages have a chance to at least keep up, which it has but not enough for the fed’s (or our) liking.
In fact true deflation pretty much only happens in severe recessions and depressions. Job market takes a hit so demand drops as people have less to spend. Prices start to go down a bit as a result. Consumers, many of whom are already hurting in this scenario, know prices are going down, are they going to spend money now or wait? They’re going to wait because they can buy for cheaper next week. That lowers demand and prices even further and companies have even more layoffs and things continue to spiral down.
Captain Cranks
Footballguy
This isn't ever going to happen.
That is very true...and this is a really good thread with good discussion and for the most part everyone has been respectful.
djmich
Footballguy
We may never do it ourselves, proactively, the right way but it will happen.
uwillbsoon
Footballguy
You'd think the folks enacting these actions would be able to speak intelligently to their predicted effects. I've not seen that.
So then we rely on the past. Tariffs have not been kind to consumers. They may create jobs, but at an extremely high cost.
Helps some. Hurts most.
Sparky Polastri
Footballguy
Generally speaking these would be good. Problem is the stated path or "budget proposal" is the opposite of #1. For #2, inflation is driven mostly by the amount of money in the economy vs the demand for such money. It's way more than gov't spending. #3 and #4 are greatly hampered by policies like "across the board tariffs" and the like.
djmich
Footballguy
You may be right but I haven’t seen enough evidence that this is true. The devils all in the details.
Captain Cranks
Footballguy
Assuming we never make the necessary spending cuts, and my point is that we won't because that would require cuts to defense and entitlements, how are we going to get our fiscal house in order?
djmich
Footballguy
We’ll print the money.
Captain Cranks
Footballguy
Ok...we're on the same page. I just wouldn't define that as getting our fiscal house in order which is what i thought you were referring to when you said "but it will happen".
djmich
Footballguy
It’s certainly not the right way
I think there are a number of reference points on how throughout history this is how major world powers have collapsed.
waiver wire
Footballguy
the 1 possible good news for us Canadians from the talk about tariffs, our elected officials may finally get rid of the barriers of provincial regulations. On a scale of 1-10 of it happening is still closer to 1 but at least it has started the talk
The talk of tariffs has already hurt your economy as 56% of Canadians wont travel to the US now for vacations.
According to the U.S. Travel Association, which advocates for the American travel industry, a 10 per cent dip in inbound travel from Canada could translate to $2.1 billion US in lost spending and jeopardize 14,000 American jobs.
"Canada is the top source of international visitors to the United States, with 20.4 million visits in 2024, generating $20.5 billion in spending and supporting 140,000 American jobs," the association said in a statement.
The talk of tariffs has already hurt your economy as 56% of Canadians wont travel to the US now for vacations.
According to the U.S. Travel Association, which advocates for the American travel industry, a 10 per cent dip in inbound travel from Canada could translate to $2.1 billion US in lost spending and jeopardize 14,000 American jobs.
"Canada is the top source of international visitors to the United States, with 20.4 million visits in 2024, generating $20.5 billion in spending and supporting 140,000 American jobs," the association said in a statement.
Desert_Power
Footballguy
Pretend is an interesting word choice.
I do think, regardless, most of us can agree that increasing the debt manner in such a slapdash manner or during times of relative economic strength isn't wise.
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beer 30
Footballguy
I'll preface this by saying I'm not an economist, I'm an idiot on a message board so take the following with a grain of salt.
I think pre-COVID, we, as a country, were a bit fat, dumb and happy. I work for a large rental equipment company, we buy a large amount of capital equipment (excavators, telehandlers, generators, etc) so we are in tune with some major manufacturing facilities in the US, UK and various Asian countries. We started to see an uptick in pricing out of the ordinary before COVID hit, nothing crazy but 5-6% instead of a typical 3%. There are always a bevy of reasons, labor cost went up, steel, raw materials went up, whatever. We weren't seeing it in the metrics we usually follow so we pushed back but again, nothing too crazy. Then COVID upended the world, did all the things, caused all the problems. The thing is, manufacturers who had arbitrarily kept pricing low for decades suddenly had an opportunity to gain it all back and then some almost immediately. They did and it hasn't let up since, leveled off some but we saw anywhere from 20-50% increases during COVID and most of those increases have stuck.
It was bound to happen at some point and I think for the most part, we've all absorbed those costs. It wouldn't hurt to see them tick back down some but it's never going to go back down to where it was. There have been some isolated goofy increases (like eggs & chicken) that are due to circumstances beyond control. Bird flu outbreaks have happened a lot more than y'all probably know about.
I say all that to get here, the increases that were put in place during COVID won't get rolled back and I think manufacturers saw the willingness of the consumer to pay the difference between where we were pre to where we are post, encouraging them to continue until they felt pushback and established a new normal. That's kinda capitalism IMO. What hasn't kept pace, at least at my micro level, is wages. During a time of record profits in my particular business, wages remained relatively flat. You get 3% in the best of times and 3% in the worst of times. This doesn't exactly incent workers to go the extra mile for the company.
Grace Under Pressure
Footballguy
De-coupling health insurance from employment would help smaller businesses for sure, and likely larger organizations as well.
Sand
Footballguy
For the most part budgets are balanced and what you don't pay for with tax receipts you pay for with inflation. IMO, we're seeing the effects of that now in spades.
ericttspikes
Footballguy
That's true, and probably the only way for things to truly change. If everyone had to buy their own health insurance it would certainly make more people aware how nuts it is and make them pissed off. Just to cover the health and dental of my own family of 4 costs us around $26,000 a year in premiums. That is basically for a high deductible, catastrophic plan. Total out of pocket for healthcare is closer to $30k a year for my family rn. Just a painful check to write each month.
FairWarning
Footballguy
I think who really got squeezed on wages were the middle class. The high end was getting theirs, while the minimum wage wage earners got a bump because the labor market was tight.
dkp993
Footballguy
Same as it ever was.
Stoneworker
Footballguy
Well the non-political discussion was fun while it lasted
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Dr_Zaius
Footballguy
That's my take on it as well. Upper management is of course doing fine, but things like engineering seem to be doing quite well too (although there are always particular sectors/industries that are the exception). And at least in PA even though the minimum wage hasn't technically budged, the wages for the low/minimum skill jobs are up substantially. I feel like mid-career medium skilled people - think people with high school or associate's degrees and maybe 10-15 years experience, are really the ones getting squeezed. They've been stuck in the 2-4% raise range, and the price spikes of the last half decade, particularly things you can't dodge like housing and insurance, is just eating into their financial safety buffer. That's just what I glean from talking to people, but I feel like if you were making $45k in 2018 chances are you don't feel great about the economy right now.
dkp993
Footballguy
Certainly not trying to defend the current economy, but, do you think those making 45k in ‘18 felt good about the economy in 2018? I’d hazard no.
Dr_Zaius
Footballguy
If you were the sole breadwinner certainly not. If you were a couple both making roughly that, maybe? I was more trying to pinpoint the section of the employment curve that's been hit the most by the events of the last few years.
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