A Gallup study of U.S. growth and productivity finds there hasn’t been any economic recovery.
“The Great Recession may be over, but America is running on empty,” writes Jim Clifton, chairman and CEO at Gallup.
The U.S. Council on Competitiveness asked Gallup to conduct, pro bono, a comprehensive study of U.S. growth and productivity for the Council's 30th anniversary, he explained.
“Conventional wisdom -- as reported in many major newspapers and media -- tells us the U.S. economy is "recovering." Well-meaning economists, academics and government officials use the term "recovery" when discussing the economy, implying that growth is getting stronger,” he said.
The study, entitled "No Recovery: An Analysis of Long-Term U.S. Productivity Decline," found there is no recovery. Since 2007, U.S. GDP per capita growth has been 1%.
“Think of our country as a company, America Inc., which has more than 100 million full-time employees, with about $18 trillion in sales and $20 trillion of debt. The most serious problem facing it is no growth. In addition, America Inc. has three soaring expenses threatening to bankrupt the company and its shareholder-citizens: healthcare, housing and education,” he said.
"As this report notes, in 1980, these three sectors accounted for 25% of total national spending -- today, they account for more than 36%. They also account for most of the total measured inflation over the same period. And without inflation in these sectors, real annual productivity -- defined as GDP per capita growth -- would have been an estimated 3.9% instead of 1.7%," he said.
“My own opinion is that America Inc. is too big to "turn around" like one would a company or any other organization. There is no quick fix to something this huge and complex. But there is a long-term fix, which is to get GDP increasing to 3% and higher while slowing the increasing costs of healthcare, housing and education,” he said.
“When real growth returns, productivity will increase, and America Inc.'s empty tank will refill,” he wrote.
Meanwhile, the stock market’s rise to record highs after Donald Trump’s presidential victory shows that investors are optimistic that the economy will improve as President Barack Obama leaves office, says Charles Gasparino, author and Fox Business Network senior correspondent.
“His promise to cut both corporate taxes and red tape will translate into higher corporate profits so businesses can expand and create jobs,” Gasparino writes in the New York Post. “Real unemployment can finally decline not because people are dropping out of the workforce but because they’re actually working again.”
Trump will come into office with Republicans controlling the Senate and House of Representatives, making economic reforms a realistic possibility instead of prolonged gridlock. Under President Obama, the U.S. economy never exceeded 3 percent yearly growth for the first time since World War II.
“With the GOP controlling the House as well as the Senate, traders see real economic growth on the horizon, not just a Fed-induced stock-market bubble where interest rates are so low there’s no other place to put your money,” Gasparino says.
(Newsmax wire services contributed to this report).
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