Addressing the World Economic Forum at Davos last Monday, President Donald Trump told the gathering that the U.S. is “in the midst of an economic boom, the likes of which the world has never seen.”
He branded the economy “the great American comeback” and “a stunning turnaround” powered by “a whole new approach centered entirely on the well-being of the American workers.”
“The American dream is back, bigger, better, and stronger than ever,” he said. “No one is benefiting more than America’s middle class.”
TRENDPOST: As we used to say in The Bronx, “Bullshit has its own sound.” Trump is wrong. “No one is benefiting more than” the 1 percent, not the middle class.
And, the Congressional Research Service report finds that the 2017 Tax Cuts and Jobs Act (TCJA) had little measurable effect on the overall U.S. economy in 2018. Indeed, as we have long noted and the CRS confirms, much of it went to $1 trillion in stock buybacks.
Further, the CRS concluded that after adjusting for inflation, wages grew more slowly than overall economic output and at a pace relatively consistent with wage growth prior to passage of the TCJA.
According to the Tax Policy Center, the richest fifth of Americans will receive nearly two-thirds of total benefits in 2018 and the richest 1 percent alone will receive 83 percent of the total benefits in 2027.
As for the overall U.S. economy, GDP is expected to grow only 2 percent this year, down from the tepid 2.3 percent in 2019.
Not a Penny to Spare
According to Bankrate’s Financial Security Index, only four in ten Americans can cover an unexpected emergency $1,000 expense with money from their savings.
While 41 percent of people said they would pay for the emergency out of savings, 34 percent said they would borrow. Another 14 percent said they would have to reduce spending on other things. One person in ten said they wouldn’t know how to pay the bill.
Among survey respondents, 30 percent said they or a family member had to foot an emergency expense in the previous 12 months; 36 percent said the expense was at least $5,000. The average emergency cost was $3,518.
Many people would not have a choice other than going into debt. A Bankrate survey in July 2019 found that 28 percent of Americans have no emergency savings; about 25 percent had fewer than three months’ expenses saved. Only 18 percent said they had savings to cover six months’ worth of expenses, the lowest number in nine years.
Rising living costs, lagging wage growth, and a consumption-oriented economy were blamed for the lack of savings.
And, as noted by a Federal Reserve, almost 40 percent of American adults wouldn’t be able to cover a $400 emergency with cash, savings, or a credit-card charge that they could quickly pay off.
