Economic Growth? Not According to These Statistics…

Economic growthSince the credit crisis of 2008, the policies of the Federal Reserve have spurred immense financial inequality in the U.S. Those individuals (a very small minority) who were able to take advantage of the monetary policies of the Fed have done extremely well in expanding their wealth. But for the rest of America, there has been no economic growth. In fact, economic conditions are getting worse for the average American.

Inequality Leads to Economic Growth?

The Federal Reserve went so far as to admit that the gap between the rich and poor is increasing. At a conference in Washington, D.C., Fed chair Janet Yellen said, “In the United States, roughly 80 percent of Americans across the ideological spectrum see inequality as a moderately or very big problem.” (Source: Federal Reserve, “Economic Mobility: Research and Ideas on Strengthening Families, Communities, and the Economy,” April 2, 2015.)

Inequality has never led to prosperity. In fact, it does more harm than good to an economy.

Americans Surviving on Debt

In this so-called “economic recovery,” the situation is dire. Americans are piling on debt and saving less while their incomes are stagnant.


Here’s the proof: as of March 2015, the amount of consumer loans at all banks in the U.S., more specifically credit cards and other revolving plans, stood at $619.83 billion. Back in just 2010, this amount stood at $318 billion. Over the past five years, consumers have seen their debt double—up 94% to be exact. (Source: Federal Reserve Bank of St. Louis, last accessed April 22, 2015.)

In the same timeframe, incomes have lagged. Average hourly earnings of employees in the U.S. increased from $22.43 in January of 2010 to $24.86 in March of 2015—an increase of 11% before inflation. Add inflation into the picture and there hasn’t been growth in real income in this country in five years. (Source: Federal Reserve Bank of St. Louis, last accessed April 22, 2015.)

Meanwhile, Americans are saving less. In the fourth quarter of 2014, Americans saved 4.6% of their disposable income. In 2012, they were saving almost double that with a savings rate of 8.6% of disposable income. (Source: Federal Reserve Bank of St. Louis, last accessed April 22, 2015.)

U.S. Economy Remains Fragile

The buzz from the mainstream media is that the U.S. economy is improving. Unfortunately, I don’t see it for the great majority of Americans. As I said earlier, I see prosperity for those that were able to take advantage of the monetary policies the Fed implemented following the credit crisis of 2008. For the rest of America, it’s a struggle.

If consumer spending makes up two-thirds of U.S. gross domestic product (GDP), and consumers are borrowing at more than twice the rate they did five years ago, while incomes stagnate and the savings rate is down 50%, how can our economy grow? I remain skeptical about any talk of growth in the U.S. economy.