The economy hasn't grown since 2007. Such news will come as a surprise to more than a few people but a Gallup Report says that is exactly what has happened - or rather, hasn't happened. Gallup said the economy is "dangerously running on empty." Gallup prepared the report for the U.S. Council on Competitiveness. The report stated:
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.The rest of the nugget-filled report is posted below.
The study finds there is no recovery. Since 2007, U.S. GDP per capita growth has been 1%.
The Great Recession may be over, but America is dangerously running on empty.
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.
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 this 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%. .... (p.2)
THE UNITED STATES HAS NOW had seven years to recover from the worst of the Great Recession. During that time, job growth has been steady, if unspectacular, and the unemployment rate has fallen from 10% to just under 5%, where it stands as of this writing. Stock prices, meanwhile, continue to reach and surpass new highs. Leading politicians and commentators reassure the public that everything is getting better.
And yet, there is a pervasive sense that the economy is not working, as documented in Gallup survey data and many anecdotal media accounts.
The people are right. The economy is not working well. But the problems did not start with the Great Recession. For decades, the nation’s income, measured as GDP, has barely grown overall; on a per capita basis, median household income peaked in 1999; the subjective general health status of Americans has declined, even adjusting for the aging population; disability rates are higher; learning has stagnated; fewer new businesses are being launched; more workers are involuntarily stuck in part-time jobs or out of the labor force entirely; and the income ranks of grown children are no less tied to the income ranks of their parents.... (p.9)
If 1% growth continued for the next 35 years, per capita GDP would increase from $56,000 in 2015 to just $79,000 in 2050. With 1.7% growth, GDP per capita goes up to $101,000 by 2050, and with 2.4% growth it enlarges to $129,000.... (p.10)
The U.S. devotes far more resources to healthcare than any other country and yet achieves worse outcomes than most developed countries, consistent with the notion that U.S. healthcare is especially inefficient and ineffective. (p.11)
The U.S. education system has failed to instill any measurable gains in the cognitive performance of children and young adults for decades, as U.S. students and adults struggle with poor rates of literacy and numeracy despite high spending growth.... (p.12)
Indeed, global GDP is also slumping, and this isn’t only a recent development. Since 2007, global GDP per capita has expanded just 0.3% per year. That is far below the annual average from 1980 to 2015 of 1.4% growth, and very far below the annual average from 1960 to 1980 of 4.0% per capita
growth. As bad as it is in the United States, other high-income countries are doing considerably worse. The European Union and Japan have actually seen a decline in GDP per capita since 2007... (p.22)
(However) Exports as a share of GDP increased from 11.5% in 2007 to 12.6% in 2015, even as global GDP growth fell. (p.23)....