While official statistics point to a healthy economy — unemployment at 5.6 percent in December, economic growth at 5 percent in the third quarter — the true picture is quite different, says Stephen Moore, chief economist at the Heritage Foundation.
"The conventional statistics of economic conditions for families aren't measuring the real hardships families are facing today," he writes in a commentary for
The Washington Times. "Is there anyone on this continent, who really thinks that the unemployment rate is 5.6 percent?"
Moore lists several problems.
- "The $1 trillion growth gap. This economic recovery is the slowest in 50 years," he says. An average recovery would have created $1 trillion more in national output and incomes.
- "The raiseless recovery. It's been 10 years since Americans in the middle class got a pay raise that kept pace with inflation," Moore explains.
- "The myth that inflation is dead." The cost of food, energy, tuition and healthcare has been increasing at two to three times the official inflation rate.
"Americans aren't breaking out the champagne because they instinctively realize that an economic recovery built on trillions of dollars of debt, overspending, and trillions more in easy money is a house of sand," he notes.
"Mr. Obama's only economic idea is to redistribute wealth via ever-rising taxes from the productive class and the job creators to everyone else. If Republicans let him, things will get worse for everyone before they get better."
Meanwhile,
Washington Post columnist Robert Samuelson says the pervasive economic weakness overseas could spell trouble for the U.S. economy too.
The eurozone economy grew only 0.6 percent annualized in the third quarter, while Japan's economy contracted 1.9 percent annualized, and China's growth slid to 7.4 percent for all of 2014, its slowest rate in 24 years.
"Think now how this might imperil the U.S. recovery. One channel is weaker exports; other countries buy less of what we make," he says.
"Another is reduced profits from foreign operations of U.S. multinationals. These represent about a third of total U.S. corporate profits. The danger is indirect. Weaker profits might depress stocks, leading to less consumer spending because shareholders feel poorer."