Surprise: The Economy isn’t As Bad As You Think

7/18/14
 
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by Roger Altman,

from TIME Magazine,
7/17/14:

7 signs America has turned the corner.

Nearly seven years after the onset of the Great Recession, the national mood remains troubled. Surveys find entrenched pessimism over the country’s economic outlook and overall trajectory. In the latest NBC News/Wall Street Journal poll, 63% of respondents said the U.S. is on the wrong track.

Despite the pessimistic mood, America is experiencing a profound comeback. Yes, too many Americans are out of work and have been for far too long. And yes, we have a huge amount of slack to make up. In fact, if the 2008 collapse had not happened, the U.S. GDP would be $1 trillion–or more than 5%–higher than it is today.

But in terms of the growth outlook, the news is good. Goldman Sachs and many private-sector forecasters project a 3.3% growth rate for the remainder of 2014.

As halting as the U.S. recovery has been, the economy is now leaner and more capable of healthy, sustained growth through 2016 and beyond.

It’s not just economic trends that are looking up: crime rates, teen pregnancy and carbon emissions are down; public-education outcomes are improving dramatically; inflation in health care costs is at a half-century low. That points to something I did not foresee last year: that the social health of America seems to be mending. Americans may still feel discontented, but winter is finally over.

1. AMERICANS ARE SPENDING LIKE THEY MEAN IT
2. HOUSING HAS COME BACK TO LIFE
3. AMERICAN-MADE MAKES SENSE AGAIN
4. ENERGY PRODUCTION IS BOOMING
5. OUR ENVIRONMENT IS GETTING HEALTHIER
6. AMERICAN SCHOOLS ARE WORKING SMARTER
7. SOCIAL TRENDS ARE MOVING IN THE RIGHT DIRECTION

THE CHALLENGE AHEAD. Our country’s biggest challenge now is the plight of lower-income Americans, who are under severe and sustained economic pressure. Today, America resembles a tale of two cities. Those who own homes or stocks have benefited from the recovery in these asset classes and are moving up again. But 40% of our working-age families earn $40,000 a year or less.

This is our primary economic challenge. If a third of our population has little purchasing power, it will be hard to achieve the rate of long-term growth we want.

With our economy’s near- and medium-term economic outlook strong, now is the time to remove the barriers that are keeping hardworking Americans walking a far too thin financial line.

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