While everyone knows that inflation makes the cost of living more expensive by the year, the extent to which inflation affects American households is less obvious to most people. A recent survey of Americans found that 44% of Americans don’t make enough money to be able to afford their expenses. That’s a worrying statistic, but not entirely surprising given that we know that Americans’ debt burden has increased exponentially over the past several decades while earnings have remained largely stagnant. Still, the fact that nearly half of Americans are underwater financially means that making America great again is going to take some hard work and require a return to economic policies that benefit Main Street, not just Wall Street.
The ideal economy is one that benefits everyone, not just the rich. Yet there’s every indication that economic growth has largely been confined to the most wealthy over the past decade. The incomes of the top 1% and even the top 5% have grown steadily, while everyone else stagnates or declines. In fact, only 17% of Americans have reported that their financial status has improved in the past six months. That’s disconcerting.
For an economy to continue growing, everyone needs to benefit. With half the country essentially living hand to mouth and unable to afford daily expenses, how will the rest continue to succeed? If half the country isn’t going to be able to afford cars, vacations, clothes, or even food, what will happen to the markets for those goods? What will happen to the people who produce those goods, or who provide services? The larger the class of people who are doing poorly financially, the worse off the entire economy becomes.
In order to restore economic productivity, the government needs to lower taxes, eliminate barriers to entry in numerous sectors of the economy, and allow Americans to become entrepreneurial again. We’re seeing the failure of employment, with many jobs no longer paying enough to allow Americans to provide for a family and build their financial future. Unless Americans are allowed the freedom once again to try to get ahead, more and more will end up being left behind.