Ticker observes that the "prosperity" trumpeted by BEA over the last 10 years is, simply, a lie.
The so-called "10.3% increase" in disposable personal income in "real terms" reported by the BEA was spread over 12% more people! That is, in per-capita terms the economy CONTRACTED over the last ten years.
Lotsa pretty charts and stuff to make his assertion much clearer.
It all depends on the measure of population. Karl Denninger relies on working-age non-institutional population to come up with his 12% increase in population. That statistic is not part of the BEA's release.
ReplyDeleteThe BEA does, however, include the total mid-year population estimate in their release, which shows a 8.9% population increase between 2000 and 2009. Over the past decade, that suggests an inflation-adjusted per-capita non-welfare income increase of 1.37%. If one puts it in yearly terms, it's a paltry 0.14%.
That still masks just how bad 2008 and especially 2009 have been. In 2000, the per-capita non-welfare income was $29,487 (in 2005 chained dollars). In 2002, it dipped to a decade-low $29,109, but by 2004, it recovered to $29,902. By 2007, it grew to $31,973. In 2008, it dropped a bit to $31,619, and in 2009, it fell off the proverbial cliff to $29,891.
Look for 2010 to be even worse.
Addendum - going all the way back to 1929, the first year the BEA kept records, there have been only 5 years that saw an inflation-adjusted drop in per-capita non-welfare income than 2009's 5.46%:
ReplyDelete1946 - -6.32%
1931 - -6.73%
1938 - -7.09%
1930 - -7.59%
1932 - -13.81%
Let's see; 4 Great Depression years and the transition between war and peace after World War II are the only years income has taken a bigger hit than in 2009.
Well, either way you cut it, the numbers are dismal.
ReplyDeleteFor quite some time, I've maintained that "free cashflow" for middle-class Americans has diminished to a dangerous low. That accounts for the inability of people to stash the proverbial 6-months' savings.
I don't think this is entirely the result of over-spending (albeit that is a part of it.) I think it has to do with the cost-problems generated by regulation and taxes, the costs of which find their way into every good and service purchased by consumers--thus the lack of 'free cashflow.'
Ugh.