Friday, September 26, 2008

Awkward Question

"..[I]t might be well if you would ask yourself, are you better off than you were four years ago?"

Ronald Reagan, October 28, 2008

A Third Way report, Are You Better Off?, by Jim Kessler, Mark Donnell, and Tess Stovall offers a simple answer to this question. There answer is "No," and is based upon their analysis of 18 measures of quality of life for two eight-year periods, 1993-2000 and 2001-2008. The average American family lost $94,929 in the last eight years when compared to the data and trends of the earlier period.

The report looks at family income and expenses. Income is down $58,945, if the incomes kept growing at the same rate as in the 1990s, a dubious point. Maybe they should have compared the four years after business recovery.

On the family expense side the reports examines prices for gas, health care, college tuition, child-care, and food. Everything went up compared to the earlier period except for ground beef and bananas.

On the family asset side things were equally grim for stocks and net home equity. Interestingly, credit card debt stayed about the same rather than growing at the rates of the 1990s.

Then Are We Better Off? moves from family well-being to the state of the our economy as a whole. Not surprisingly, we are worse off than the 1990s for gross domestic product, unemployment, uninsured, pension coverage,job creation, new patents, government debt, and trade. College degree attainment showed a slight uptick.

I suspect that even when we compare apples to apples for business cycles the answer to the question "Are We Better?" would be the same. No!

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