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Median Household Income Is Flat

Written by Gary North on September 18, 2013

In 2012, median household income in the USA was flat.

Adjusted for price inflation, it was down 9% since 1999: the Clinton era. It is where it was in the late 1980s: early Bush I.

All this has happened under Keynesianism. The engine of economic development has gone flat for 80% of Americans.

Those in the top 20% have improved since 2009, but they are still not doing well. The government’s recovery has yet to restore the upward momentum of 2007. The boom is gone. There is no sign that it will return.

According to Keynesian economic theory, none of this should have happened. The federal government is supposed to be able to manage the economy, so that recessions are short and mild. But that theory was blasted by the recession of 2008-9. The recovery has not done anything for the vast majority of Americans.

Keynesians are still dominant in American government and the university classrooms. Old dogs do not learn new tricks. Government-subsidized old dogs are paid not to learn new tricks. But reality still cannot be waved away by Keynesian slogans. The federal budget deficit remains high. So does the purchase of government debt by the Federal Reserve System. So does unemployment.

The old Keynesian formulas are not producing what the Keynesians always promised: steady economic growth for the entire economy. The elite is doing a little better. The average (median) American family is not.

Continue Reading on www.nytimes.com

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4 thoughts on “Median Household Income Is Flat

  1. Keynes advocated government spend during recession and save when demand exceeds supply in good times. He didn't advocate corrupt spending, unpayable debt , and hyper inflation ALL OF THE TIME. Apparently college education has no correlation to either fact or logic today (???), and the nation is on the cusp of collapse as a result!

    Government actions to mandate 120% loans on property worth 60% of loan value, to people who can't make payments, on a Barney Fwank – Dodd scale is called an organized criminal enterprise – theft of an unimaginable scale. Keynes would agree. Our corrupt executive-legislative-judicial system's response is no prosecutions, counterfeiting currency and bonds, raising taxes, and passing theft costs off to home owner-borrowers, to make sure they pay their fair share to the piper!

    How is it we imported 2/3 of our crude oil at monopolist prices because GOVERNMENT government prohibits free access to our own more than abundant supplies? Once upon a time monopolist conspirators paid treble damages and went to jail! Supply & demand … savings and resources… progressives doing the demanding and lemmings doing the supplying… sounds a bit like progressive world government.

    Can anyone remember when government reduced spending during inflation (NO?). Keynes recognized both consumption (spending) and saving (investing). Money is spent to consume and invest – difference is nothing is left after consumption and productive wealth regeneration is gained by true investment. Today's econo-myths don't know the difference!

  2. Keynesianism is the Red Bull of economics. It was meant to give a shot term shot of energy when things are slowing down. It was never supposed to be a full time, all the time, basis for an economy. Unfortunately, since liberals love government control, they adopted it as their base economic policy. Bad move. Over the long term it will doom any economic system. For example, look where our poor benighted country is right now. See my blog at http://cranky-conservative.blogspot.com

  3. A few months ago I checked our tax returns from the late 1980's. Sure as sh.. my wife and I are back to those levels the last couple years.

    My real estate taxes, gasoline for the car and utility bills were a third of what they are today. Health insurance premiums were a fifth (I know they are tied to age, I am 25 years older, but still). Taxes on my utility bills were negligible. Sales tax on purchases was half of what it is today. My state income tax has gone up by two thirds and I guess my federal taxes (FIT and social security) are similar.

    I would not be able to afford a home and raise children as we did if back then was today.

    Government at all levels and the Federal Reserve (inflation) has legally robbed us to get to the point where we are today.

    I feel terrible for our children, that they are responsible to service 17 trillion in debt and growing with no end in sight. As they get older I am sure their standard of living will go down. How depressing!!!!!!!!!!

  4. Kathy Sudduth says:

    Obama has sent way too many government contracts out of the country. Trying really hard to spread the wealth and be king of the world, he is.