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Tag Archives: personal income and expenditures

The Confusing State Of Retail Sales

Written by Steven Hansen Warren Buffett is confused about retail trade stating "retailing is tough for me to figure out". Not only is the retail model changing - but consumer spending and inflation trends are changing also. Follow up: Mr. Buffett was lamenting about missing the Amazon investing train - not understanding that the retail model was changing from the box stores to internet purchasing. But it is not just the trend towards online purchasing occurring in retail - but other...

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Rising Tide Does Not Lift All Ships

Written by Steven Hansen Much has been said about trickle up and trickle down economics. It seems like a litmus test to divide the political parties. Is there any evidence that any variation of the trickle theme works? Follow up: Since 1980, the USA has had 17 years of Democratic Presidents and 20 years of Republican Presidents. And Congress (which holds the purse strings) was almost equally divided between control by Democrats, control by Republicans, and split control. The basic...

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Income Is Not Wealth

Written by Steven Hansen Some time back, a reader commented on one of my posts stating: Just out of curiosity for whom have lower taxes created more wealth? Certainly not the middle class - you know, the people in the charts up above with the 40k or less in net worth. A large number of folks in that median and sub-median are pay little or no Federal income tax, although if they work they do pay the flat earnings tax called FICA. Yet they still can't or won't save. Follow up: Recently,...

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2015 Household Income Up 5.2% Is Just Spin

Written by Steven Hansen The media spread US Census' good news: Median household income in the United States was $56,516 in 2015, an increase in real terms of 5.2 percent from the 2014 median of $53,718. This is the first annual increase in median household income since 2007, the year before the most recent recession. 5.2% is a big number which does not gel with other economic realities. Follow up: Most ignored the second line in the sentence in the US Census summary: In 2015, real...

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USA Government Is Starving Social Programs?

Written by Steven Hansen Americans have been convinced that due to demographics and general waste, social programs are out of control and need to be reined in. True or Not? Follow up: I would like to disclose my biases - anything big (like big government, big business, the wealthiest 0.1%) ends up doing a growing number of bad things.  It is dangerous to design systems where power can be concentrated.  That said, even small systems cannot be perfect. So there is no argument that there is...

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Are The USA Government and Business, Not The Consumer, The Real Drivers Of the Economy?

Written by Steven Hansen According to Wikipedia: A consumer economy describes an economy driven by consumer spending as a percent of its gross domestic product, as opposed to the other major components of GDP (gross private domestic investment, government spending, and imports netted against exports). Follow up: Using Gross Domestic Product, the economy looks this way - and is driven by consumers (66% consumer driven). GDP starts with cash flow data, separates income from...

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Personal Income Improving Nicely – NOT

Written by Steven Hansen Last week I penned Income Improving Nicely - Expenditures Not. Maybe Personal Debt Is Becoming Too Large. This post was silent on other reasons which could be causing sluggish spending growth. Follow up: There are a variety of reasons for soft spending growth. I believe non-mortgage debt growth is only one of the reasons - as recently credit growth as fueled half of the consumption growth. But the primary constraint is likely poor income growth. In last week's...

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Income Improving Nicely – Expenditures Not. Maybe Personal Debt Is Becoming Too Large.

Written by Steven Hansen This past week, data from the BEA showed personal income was improving nicely whilst consumer spending was muddling along. Follow up: This is not a brand new trend but has been occurring for most of 2015.  The divergence of growth between income and expenditures is evident in the chart below. For the 21st century during periods of expansion, disposable personal income and personal consumption have danced around 2.5% year-over-year growth. Expenditures has...

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The USA Has an Almost Healed and Improving Economy????

Written by Steven Hansen Most realize something is broken in the current economy - and it is aggravating to listen to the litany of "information" pumped out in the media. The Fed continues to talk up the economy and continue to dangle the prospect of rate increases which suggests an almost healed and improving economy. Seems everything is getting rosy, and the only reason the economy is not doing better is because of the politicians as they are either spending too much or too little - or...

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